Getting laid off better than retiring early?

[skyvue]

I know a couple people in Ohio collect benefits and all they have to do is call a 1-800 number each week and answer a couple prompts via the touch tone pad on their phone. The whole thing takes them about one minute per week and they never have to actually talk or explain anything to a real person.

 

[Leonidas]

Again, there is a difference between what is legal and what is moral, and I see a lot of hiding behind legality and denial of morality.

But I can play legal as well. 20 CFR 604.5 - Application--availability for work

(a) General application. A State may consider an individual to be available for work during the week of unemployment claimed under any of the following circumstances:

(1) The individual is available for any work for all or a portion of the week claimed, provided that any limitation placed by the individual on his or her availability does not constitute a withdrawal from the labor market.

(2) The individual limits his or her availability to work which is suitable for such individual as determined under the State UC law, provided the State law definition of suitable work does not permit the individual to limit his or her availability in such a way that the individual has withdrawn from the labor market. In determining whether the work is suitable, States may, among other factors, take into consideration the education and training of the individual, the commuting distance from the individual's home to the job, the previous work history of the individual (including salary and fringe benefits), and how long the individual has been unemployed.

It's clear that the intent here is for people receiving unemployment insurance benefits be genuine seekers of jobs and are ready and willing to take up such work. Pretending to be seeking or available is not the same thing. Just because there is a easy way to comply with regulations only makes it legal, not morally right.

Whose money is it anyway? OP is asking each of us to support his early retirement by an extra year with our tax dollars because he's tired of working and he sees a way to get around the law.

No wonder this country is so f&($ed up.

 

[MasterBlaster]

If I had to take the money I would feel really bad about it and cry all the way to the bank.

 

[REWahoo]

No wonder this country is so f&($ed up.

Yep.

 

[Texas Proud]

You make it sound as if "unemployment benefits" consists of sitting on the couch eating bonbons all day.

I think it's closer to being paid to do a job search. Most unemployment rules require the beneficiary to actually be going through the motions, if not the intent, of finding a job: answering ads, floating résumés, going to interviews. Sure, fraudulent intent isn't difficult to implement, but keeping up the scheme requires serious effort. Why, it's almost like... work.

My sister is collecting unemployment and she looks at it as a job... she knows she will not be hired as her computer programming skills are very old school.... so she puts in X number of hours doing what she needs to get her paycheck...


ALSO... where do people think these funds come from They come from companies paying unemployement insurance... so if you get paid benefits, the company has to pay more the next year to pay for your benefits...

 

[ziggy29]

ALSO... where do people think these funds come from They come from companies paying unemployement insurance... so if you get paid benefits, the company has to pay more the next year to pay for your benefits...

I don't remember exactly when it was -- I think it was in 2007 -- the state of Texas got the genius idea of suspending collection of unemployment insurance premiums paid by employers because the fund was in such strong shape.

Oops.

 

[jIMOh]

As far as a separation package, take whatever is offered and do whatever you want to with it. I have heard of cases where an employer offered larger separation packages to employees who agreed not to file for unemployment benefits. I guess this keeps their unemployment insurance expenses lower -- not really an expert on that subject, though. Maybe somebody else can comment on that. Seems a little sleazy on the surface.

Perhaps you can negotiate a better separation package if you agree not to file for unemployment. Then feel good about not taking unemployment.

My wife is an HR consultant, she has never lost a an unemployment hearing if the employer challenged the claim.

If Anyone here negotiates a larger severance to forgo unemployment, call my wife- she can help you sue the employer. She says no employer can legally prevent you from claiming unemployment benefits even if it was in writing in the severance, as the employer would face large fines for putting it in writing to begin with. Meaning you can double dip the larger severance and the unemployment if you negotiate this way.

 

[old woman]

Taking unemployment cost the last employer in a higher experience rating. Our company pays 6.03% into unemployment. That is the max so my collecting might not cost them anything but would cost the state.

If you have a small employer paying a low rate it cost them in a much higher rate the next year. When working for a company with 3 employees for 11 the new owner didn't make payroll and when we demanded our pay he terminated everyone.
I collected 5 months wanting to cost him money. I didn't really want to work the first couple of months then my boyfriend was injured and couldn't drive so I took care of him. I got a job the first day I looked.

Now in this company 8 years I would be embarrassed to have them think I couldn't get a job or cheated the system. I am 61 and unemployment is more than SS. If you take SS they assume you are retired I think.

If I wanted to collect while having a year or two off I might work as a temp or take a job I didn't really want. Work there a while doing the minimum, putting in my 40 hours taking all vacations and sick days I could stretching that job to a couple years or temping a couple of years unemployed several weeks at a time. Then collect SS after unemployment ran out.

Construction workers and others collect several months a year. I might do seasonal work like only tax returns in tax season and be laid off the rest of the year. How much call to do 1040s is there in the fall?

 

[FUEGO]

But I can play legal as well. 20 CFR 604.5 - Application--availability for work It's clear that the intent here is for people receiving unemployment insurance benefits be genuine seekers of jobs and are ready and willing to take up such work. Pretending to be seeking or available is not the same thing. Just because there is a easy way to comply with regulations only makes it legal, not morally right.

Whose money is it anyway? OP is asking each of us to support his early retirement by an extra year with our tax dollars because he's tired of working and he sees a way to get around the law.

So you are arguing legislative/regulatory intent? The CFR regs seem pretty clear without trying to divine regulatory intent. The regs say you can't limit your availability for work, except to the extent the regs say you can limit your availability (work must be suitable). So if you are offered a suitable job, take it or stop collecting.

If you are morally opposed to taking government money through unemployment, then don't. You could always forgo your government pension a month or two, you know, for the cause. These are difficult economic times after all. You seem pretty well off.

Or wait, you worked a job, you took the other end of the bargain. You got your loaded government pension. I'm not going to begrudge you that.

But consider a person who takes a W-2 job gets unemployment insurance coverage regardless of whether they want it or need it. It costs them in the form of a lower salary than what it would otherwise be were they self employed or an independent contractor. So they become unemployed through no fault of their own, and they collect UI payments as long as they fulfill the established guidelines (look for work, don't refuse suitable employment). They are taking advantage of the bargain they entered.

I wouldn't feel bad if our family collected $110,000 in UI payments over the course of 99 weeks if we were not able to find suitable employment during that time. What are we to do in these difficult economic times after all? High unemployment and all that. This is real money we are talking about. Obviously I would not violate any laws. In fact I would probably conform to the laws more than most would.

Now if you want to talk about how broken the system is where two able bodied workers like myself and my DW could get paid $110,000 as long as we look for suitable work and don't turn down suitable offers, let's talk. But not here, since I'm afraid that would be politics.

I'll just say I think it is ridiculous and that it is a clear economic incentive to NOT work unless you find the perfect job. I'd shovel horse manure for $2 an hour if I had to in order to provide for myself and my family. Except wait, the government will pay me a nice hefty sum to not work, and hold out for suitable employment. I have been a small business owner and could not find temps to work for me because they made more on UI. It is frustrating. Broken system. I agree with your statement "No wonder this country is so f&($ed up. " But the solution isn't for me to turn down $110,000 on offer. It's to stop offering $110,000. /rant off

 

[W2R]

If your goal is to retire early (before the official retirement date allowed by your company) wouldn't it be better to try to get the company to lay you off or eliminate your position instead of just flat quitting? The implication is you could draw unemployment benefits for a year or so.

I realize the idea is a bit of an ethical dilema but I will be somebody who will have worked my whole life (hopefully) and not drawn one dime of unemployment, food stamps, welfare, etc..... Basically paid "into" the system and not taken any sort of handout or even a subsidized loan. Part of me thinks I could get over the guilt pretty quickly.

Frank retired in conjunction with a big layoff today. He is old enough to qualify for retirement. After all the check-out procedures, and turning in his badge, the next step was for those laid off to go to the "transition center", across the street from work.

Representatives of the unemployment office and of megacorp were there to straighten out who was to get unemployment, and who was not. They will be looking at Frank's case, and at the case of everyone who is being laid off. Everything was out in the open and aboveboard and there is no way that he or anyone would get unemployment in any unethical way as far as I can figure out. Frank will find out more there tomorrow but the unemployment guys know that he is retiring, and I know he is not counting on unemployment.

The great thing about being laid off when retiring is not the unemployment - - it's the severance pay, the retention bonuses, and so on. These can be huge in a big layoff, because they don't want everyone to quit as soon as it is known that a layoff is in the works. Frank will not even need to touch his savings for quite some time. So who needs unemployment?

 

[audreyh1]

Frank retired in conjunction with a big layoff today. He is old enough to qualify for retirement. After all the check-out procedures, and turning in his badge, the next step was for those laid off to go to the "transition center", across the street from work.

Representatives of the unemployment office and of megacorp were there to straighten out who was to get unemployment, and who was not. They will be looking at Frank's case, and at the case of everyone who is being laid off. Everything was out in the open and aboveboard and there is no way that he or anyone would get unemployment in any unethical way as far as I can figure out. Frank will find out more there tomorrow but the unemployment guys know that he is retiring, and I know he is not counting on unemployment.

The great thing about being laid off when retiring is not the unemployment - - it's the severance pay, the retention bonuses, and so on. These can be huge in a big layoff, because they don't want everyone to quit as soon as it is known that a layoff is in the works. Frank will not even need to touch his savings for quite some time. So who needs unemployment?

Well - I guess congratulations are in order! What convenient timing! And to get a "bonus" for retiring - I wish I had gotten one!

And how spooky that it coincides with this thread!

Audrey

 

[RunningBum]

The great thing about being laid off when retiring is not the unemployment - - it's the severance pay, the retention bonuses, and so on. These can be huge in a big layoff, because they don't want everyone to quit as soon as it is known that a layoff is in the works.

This is what I'm hoping for, but I'm not holding my breath, since I wasn't nearly old enough to qualify for it, and it doesn't look like another one is coming.

I can see where the OP is coming from, I'd like to leave with something more in my pocket, but I don't feel right about trying for unemployment.

I suppose the way I ought to look at it is that another 3 or 6 months pay really doesn't add that much to my net worth (especially if it was based on my part-time salary) rather than feeling cheating by leaving empty. I just haven't had anything else pushing me out, though I'm starting to understand more and more that even telecommuting with flexible part-time hours, I'm not really free.

 

[W2R]

Well - I guess congratulations are in order! What convenient timing! And to get a "bonus" for retiring - I wish I had gotten one!

And how spooky that it coincides with this thread!

Audrey

Thank you!!

I thought so too, especially since I had just posted about his retirement over in the "what did you do today" thread, and then I first noticed this thread!

 

[Nords]

But hey, I'm an old dinosaur who still comes to attention and stops talking when the national anthem is played prior to the start of a ball game...

What is this "going to a ball game" you refer to?

Again, there is a difference between what is legal and what is moral, and I see a lot of hiding behind legality and denial of morality.
No wonder this country is so f&($ed up.

I think OP has tapped into a vein of resentment where employees feel obligated to show just as much consideration and loyalty to their employers as their employers have shown to them...

Otherwise Scott Adams would be collecting unemployment "benefits".

 

[DWPC]

Is COBRA an issue for you

This adds to the moral dilemma for those "choosing" lay-off, but its important to know that the Jobs Bill just passed extends COBRA for health insurance for laid off workers, and subsidizes the worker's payment too. IIRC, the govt pays the COBRA premium in excess of around $400 up to 18 months. That can be a lot of money for someone laid-off/retiring before Medicare age.

The other issue I didn't see mentioned is that one pays into unemployment "insurance" while working. If one hasn't used it, chances are they've paid in a substantial amount by retirement age. I've never been unemployed since college; I hate to think how much unemployment I've paid in over 40+ years, even though I know I'm lucky to never have needed it.

One way or another, anyone holding a job is displacing someone looking for work and that's little different from voluntary unemployment thats consuming benefits someone else may need. I've had many hourly workers who would routinely volunteer for (or start goofing off to accelerate) lay-off as soon they accrued enough unemployment to get benefits.

 

[growing_older]

If I were almost ready to ER, but a package and layoff might make retirement possible, I'm not sure I'm convinced that the unemployment insurance and COBRA package isn't being used appropriately. In the absence of a package, the worker would have remained on the job. Even if they are not so desperate for work that they will take just anything, in part they gave up their current employment (became unemployed) as part of an actual layoff. Maybe these "packages" need to be more explicit about what is and isn't included. When I was laid-off, HR was very excited to show me all the unemployment compensation and COBRA subsidy I could expect as part of my "package"

(Which as it turns out I got none of, since I found work the very next day. Maybe I'm doing it wrong.)

 

[REWahoo]

The other issue I didn't see mentioned is that one pays into unemployment "insurance" while working. If one hasn't used it, chances are they've paid in a substantial amount by retirement age. I've never been unemployed since college; I hate to think how much unemployment I've paid in over 40+ years, even though I know I'm lucky to never have needed it.

I thought employers, not employees, were taxed for unemployment insurance. Is that not correct?

 

[FUEGO]

I thought employers, not employees, were taxed for unemployment insurance. Is that not correct?

I believe that is correct, but my employer has no problem showing us every year at the annual meeting "UI insurance benefit" as a cost of employment for each employee in terms of our total benefits package.

 

[theloneranger]

I rushed immediately to this topic when I saw the first two words....
turned out this is not exactly what I originally thought.

 

[Texas Proud]

This adds to the moral dilemma for those "choosing" lay-off, but its important to know that the Jobs Bill just passed extends COBRA for health insurance for laid off workers, and subsidizes the worker's payment too. IIRC, [-]the govt pays [/-] your former employer pays the COBRA premium in excess of around $400 up to 18 months. That can be a lot of money for someone laid-off/retiring before Medicare age.

The other issue I didn't see mentioned is that [-]one [/-] your employer pays into unemployment "insurance" while working. If one hasn't used it, chances are [-]they've[/-] their employer paid in a substantial amount by retirement age. I've never been unemployed since college; I hate to think how much unemployment [-]I've[/-] my employer paid in over 40+ years, even though I know I'm lucky to never have needed it.

One way or another, anyone holding a job is displacing someone looking for work and that's little different from voluntary unemployment thats consuming benefits someone else may need. I've had many hourly workers who would routinely volunteer for (or start goofing off to accelerate) lay-off as soon they accrued enough unemployment to get benefits.

Here... let me fix that for you....

 

[ziggy29]

I thought employers, not employees, were taxed for unemployment insurance. Is that not correct?

Depends on the state. IIRC, when I lived in California there was a payroll tax on the order of 1%, so in some places there's at least a partial *direct* employee contribution (knowing, of course, that any taxes employers pay are a hidden part of an employee's overall "compensation" or cost to hire).

 

[tryan]

Was told the bus drivers in our school district collect UI during the summer.

Talk about scamming the system!

 

[BunsGettingFirm]

Don't count on doing a lousy job and being canned right away. We have a useless, self-styled "community manager". Translation: He answers 20 emails from 12 year olds, clean his email box of spam, surf the net for two hours in the morning before proceeding to watch Hulu for the next 6 hours every day. He nonetheless manages to blow a lot of smoke to waste people's time so that it would appear that he is productive. Despite not having done a lick of work for the past 2.5 years, he is still with the company because his buddy hired him and the big boss wanted to protect him. Meanwhile, a productive user interface designer was let go because he refused to move out to the West Coast. So if your plan is to stop working, you may have to wait a long time before you get laid off.

 

[Midpack]

I thought employers, not employees, were taxed for unemployment insurance. Is that not correct?

Employees ultimately pay for everything. Whether in taxes, or as consumers thru increased prices or reduced value for goods and services. It amazes me that anyone thinks employers pay in the end...we all pay.