Severance Packages That Say You Resigned - A Dirty Trick?
A lot of the severance packages that I see say that the executive has "resigned" her position. But this is a fallacy because severance packages are typically only provided to executives who are terminated. People who resign are not usually provided with severance packages because they leave voluntarily. Severance pay is used to ease the transition for executives who are asked to leave the company. So what is going on here? Why do they sometimes call it a resignation when clearly it is a termination?
People feel better if their departure is called a resignation and they don't object. But this sugar coating can prevent you from getting unemployment benefits. In New York and most other states, a person who resigns is not entitled to unemployment benefits.
If you sign a severance package that says you resigned, your employer can use that agreement to deny your application for unemployment benefits.
If your severance package says that you resigned, you might want to ask your employer to change that. Remove the word "resigned" and make sure the agreement accurately reflects the fact that your employment was terminated by your employer. You can also ask your employer to include a promise not to contest your application for unemployment benefits.
