Many employers regularly pay severance pay in exchange for unlocking the rights under a separation agreement. The common question is whether a former employee can dive double. In other words, can this former worker receive unemployment benefits while receiving severance pay? The answer may be a business – a „maybe” that can be influenced by the way the separation agreement addresses this problem. Employers should ensure that the separation agreement for unemployment benefit covers severance pay over a specified period of time in order to avoid dual immersion. To complicate matters, remember that the TWC will probably take the position that the worker had no choice but to sign the agreement or expect dismissal, and as such, the TWC will administratively shift the burden of proof and let the employer err in the oral proceedings. At the end of the day, you also need to be prepared to prove a case of misconduct. The separation agreement is not a place to try to get an employee to accept issues such as competition bans, employer denigration, restitution of company ownership, etc. unless they were clearly defined at the time of hiring. If these topics were sketched at the time of hiring, the separation agreement is a good place to amplify them. Severance pay is the remuneration and/or benefits that an employer gives to a worker at the end of the employment. Severance pay may include extended benefits such as health insurance and out-of-home assistance to help an employee get a new position. The question is pretty much: „But we gave them a package of severance pay, why do we have to pay unemployment?” The answer to this question is the one that employers hate – because there is no indication of unemployment, because there is no indication of unemployment.
In the end, the answer remains the same: an employer cannot renegotiate a worker`s right to apply for unemployment. Since the labour code prohibits and criminalizes agreements that require workers to waive their right to unemployment compensation, you cannot add anything to the agreement that expressly states that the worker renounces his right to unemployment compensation. The best thing you can do is add an additional sentence to the employment contract that says, „As far as the law allows, payments under this agreement should be considered wages instead of termination under the Texas Unemployment Compensation Act. Keep in mind that if such a rate works, it will only apply for the period covered by the payments. Subsequently, the employee can claim benefits and you must then object to the payment of additional benefits with voluntary protection against dismissal or misconduct, as in any other case. When a separation agreement is concluded, it surrounds the terms of the separation and, as a rule, will encourage the employee to sign an agreement that waives the right to sue the employer for improper dismissal.