In today’s economic environment, reductions-in-force are not only unavoidable, but necessary in order for companies to meet the demands of  an ever-changing business and economic environment.  And, while no company wants to lay off any employee, there comes a time when layoffs must happen.

In what could be viewed as an “entitlement benefit,” the majority of companies in the United States prefer to provide a lump-sum severance benefit to their reduced workforce in order to provide a “cushion” to new employment.  Unfortunately, this type of severance, when coupled with the potential for the laid off employee to receive state unemployment insurance (UI) benefits simultaneously, may inadvertently encourage that former employee to stay out of work longer than is necessary. 

Published in Unemployment Benefits