No Unemployment Benefits If You Quit Your Job

If you quit your job, you get no unemployment benefits. The EDD will determine that you don't need the money, otherwise, you wouldn't have quit your job.

Therefore, if you want to collect unemployment benefits, you must learn how to negotiate a severance and get laid off instead. If you are laid off, you not only get unemployment benefits, you can also get a severance package.

In 2012, I negotiated a severance package that paid for five years of living expenses. The only way I could do so was by getting laid off. Then I was able to collect 26 weeks of unemployment benefits.

Long ago in 2011, the US Labor Department reported the federal government and states overpaid $14 billion in unemployment benefits, equating to 11% of ALL jobless benefits paid out. This isn't surprising given how inefficient our government is.

Thankfully, the economy has improved, but the overpayments still persist!

The $14 billion in overpaid benefits went to three groups:

1) Those who aren't actively searching for a job.

2) Those who continue to file claims even though they've returned to work.

3) Those who were fired or quit voluntarily.

If you received unemployment benefits and are in any of these groups, then the government wants their money back!

Thoughts On Reality

The first claim is hard to prove because who is to say whether one is actively looking or not? How long does one have to actively look a day? Does one need to actually speak to prospective employers? Or are emails and voicemail follow ups good enough? As you can see, “actively searching” is a very vague requirement that can be interpreted in many ways.

For the second claim, if you continue to file claims even though you've returned to work, that is fraud. I don't quite understand how one could start working a regular W2 job again and still get unemployment benefits since the new firm must register with the State.

The same goes for someone who incorporates a company with all the fees and documents one must pay and submit. That said, our system is so inefficient that I can easily see how there could be a temporary overlap.

Finally, notice how the Department of Labor says if you were FIRED or quit voluntarily, you aren't supposed to receive unemployment benefits. That's right folks. The State and Federal government must confirm with your ex-employer first before benefits are distributed.

If you quit your job, it is telling your employer that you don't need income. Since you don't need income, you certainly don't need unemployment benefits! If you are fired for cause, then not getting unemployment may be the least of your worries.

Friends Don't Let Friends Quit Their Jobs

One of my friends quit his job despite me telling him over and over again not to. He had been working at his tech company for four years and had enough of his mind-numbing work.

As an IT person, he was confident he'd find another job after traveling the world. It's been 15 months now and he hasn't found anything! He's blown through his 10 months of savings, which includes his emergency fund. He's now considering moving back home with his mother.

Another friend worked in finance and said she wanted to “do the right thing” by quitting. I asked her to explain what “doing the right thing” meant? She said she felt it would look bad getting laid off so she quit instead.

Missed Out On A Nice Severance Package By Quitting

The very next month, two of her colleagues got let go with about six months of severance, six months of health care insurance, two months of base salary due to the WARN Act, and job assistance training.

She was infuriated! She later admitted she was afraid to face her boss and HR so she quit instead. Now she's desperately looking for something new during a time very few companies hire during the 4th quarter.

Today, the unemployment benefits are incredible thanks to tremendous government support during the pandemic. Don't quit your job and get nothing. Get laid off and collect unemployment!

No Unemployment Benefits If You Quit Your Job
As of 2021

Related: You can collect unemployment benefits if you have investment income

Have The Confidence To Negotiate

Quitting your job is selfish. The right way to go is to negotiate a severance and find a replacement before leaving. If you do, you stand a much higher chance of getting a severance.

The more I study this topic, the more I realize it is pride, fear, and a lack of knowledge that are causing people to quit their jobs instead of negotiating an amicable separation. Employees have more rights than we know.

Do your best never to get fired or quit your job. $21,000-$24,000 a year on average for maximum unemployment benefits is real money that can help hold you over until you find something new.

If you want to learn how to negotiate a severance, you can buy my book, How To Engineer Your Layoff. It was first published in 2012 and has since been revised six times and doubled in size to 240+ pages thanks to tremendous reader feedback and answers.

Both my wife and I negotiated six-figure severances and haven't been back to work since 2012 and 2015, respectively. We now live freely and get to spend our time with our kids. A severance is an amazing blessing. Use the code “saveten” at checkout to save $10.

How to engineer your layoff - learn how to negotiate a severance package and be free

26 thoughts on “No Unemployment Benefits If You Quit Your Job”

  1. Can u still get unemployment if someone get u terminated for lying on u about u was smoking marijuana on the job and it wasn’t u it was somebody else’s and u got terminated with him without a warning or a drug test just u got terminated without hearing your side of the story what should i do and i got witnesses and a the camera at work i was talking to an old coworker in front of the camera and my gm wrote it up and she wasn’t at work that day and the manager that was there said they didn’t see me smoking just the other coworkers and he admitted he was smoking and that i wasn’t around him when he was smoking

  2. Unemployment insurance is a good program and I totally agree that they shouldn’t be paid out in case of firing or quitting. But, if you’re laid off then it makes sense. But, the inefficiency leads mobs to try and get benefits because most likely they’ll get them.

  3. Jason Clayton | frugal habits

    Sam, I’ll have to check out your book. Sounds interesting…

    Fortunately for me, I’ve never felt the need to quit and have enjoyed every job I’ve held (except for a summer job in high school folding cardboard boxes for 60 hours a week – mind numbing). Although I credit that job for making me stick it out in college, so it was good all around.

  4. Sam,

    Great points. May I ask how the book sales are going? It’s a great topic to address.


    1. Going well! I’m not going to be retiring from retiring, but I’m so happy to have written it. I want to level the playing field b/c its not a fair fight against the employer.

  5. I knew a guy who quit his job and then filed a claim to try and get unemployment by making all these false accusations about his previous employer. Not only did he burn all his bridges by doing that (the EDD had to notify his previous employer about the incident), he didn’t get a cent in unemployment benefits.

    1. Thank you for this example. People need to realize that unemployment insurance must be verified by the EMPLOYER. It just doesn’t independently come from the State/Feds!

  6. The only way you can collect unemployment after you return to work is illegally. They also calll it the cash economy! Most people who quit are angry and make theri decision based on emotions. It s too bad because they could be far better off if they have a plan.

  7. Chris Winter

    1) Those who aren’t actively searching for a job.

    I will eat my right hand if the guy in the apartment below me is actively searching for a job. Actually, I think he has a job: smoking weed. :)

    I wonder how much sleep I’ll get tonight with his “night-time activities”. :/ I love going to work feeling like a zombie.

    1. Ah, but that’s the thing. There are no rules as to what “searching for a job” entails.

      One person’s search, is another person’s marijuana induced coma. Besides, perhaps your neighbor has a trust fund or invested wisely and is just living off his dividends. You never know!

  8. I worked with a guy who was fired because he was leaving early on days that he had an early class. His manager had given him permission to do so, verbally, but denied it when questioned by HR. So he sued for unemployment and recieved it because others in his department testified that the manager had said that it was OK to leave early if their work was done. So, in that situation, he did recieve it after being fired. BTW, his manager wouldn’t have fired him but some union guy had been keeping a log of when he was leaving and HR was able to match it to badge scanner times at the exit gate. We were non-union engineers.

  9. Not too long ago I had a post about considering getting myself fired. State aide is better than the insurance I have, and I feel that my employer is dishonest. But in the end, I decided that having a job, a reliable solid income, is more important than anything else! Especially since I have a family!

    1. This is the one thing employers fear a lot, an employee who highlights perceived dishonesty. The recent whisteblower who went to jail for a couple years but now has a $100 million windfall is a interesting example!

  10. Hi Sam,
    I am no expert here, but I was smart enough to wait for the layoff which kept me covered for nearly a year’s time. We knew the company was being bought out soon. Patience, I kept telling myself, although those last few months were just a waiting game before the axe fell. Sure enough it did – me and five others were “laid off”. Hallelujah! I went back to school, retrained myself and now, 10 months later, am doing something that I really love, thanks to my unemployment benefits. Good post.

    1. You are smart to have waited and to not be rash as a couple of my friends were in this article. Seriously, that is awesome you got taken care of for one year and went back to school to do something new!

  11. Yeah–that sucks. When I was on unemployment I got paid for one week of benefits after my DOH. I didn’t start until two weeks later so had no income to speak of until then, but Alabama was very efficient on asking for it back and getting it settled. I’m shocked there can be so much overlap.


    Majority of companies, especially in liberal paradise San Francisco offers some type of severance due to the difficulty of firing someone. A lot of performance is considered subjective. In my company they take a 6 month stress leave which pays them a full salary for three, and 50% for the other 3. After 6 months the work is still there, so now they are behind and claim further stress. Within 3 months they get up to a year severance.

    Companies view a bad or non performing employee as much more costly than a severance package as they can affect others. Due to fear of lawsuits even if you got fired for cause a company will not reveal that to any other company during a reference and background check.

    1. Indeed. Subjectivity is exactly what I’m trying to highlight in point #1. Since things are subjective, things are therefore open to NEGOTIATION!

      It’s important to understand how the company/your managers perceive you. Everything has a workable solution as I write in my book.

  13. What Lance says is true. In our company we had tens of cases where people quit and then filed for unemployment. And naturally we told the unemployment dept. these people quit.

    However, one thing Sam said deserves a highlight: many employers will work with you if you approach them, especially if times look a little tough or you know you’re not getting along with your boss. If you make their lives easier, many will make yours easier. And the price a company pays for acquiescing to an unemployment filing is minimal, so they don’t have an incentive to fight too hard.

  14. I was trying to tell my friends the other day that if you quit or get fired, then you are not qualified for unemployment. No one believed me. UGH!

  15. When I worked at an accounting firm we would often hear stories of clients denying unemployment because the person in question quit their job. Do people not understand the system or are they hoping their employer will lie for them so they can get benefits?

    1. I think that people don’t look at the big picture before they make a move like that! It’s so important to weight everything….including the price of your benefits and retirement! I think people often quit too soon without having another job lined up and this is financial suicide!!

    2. This article as well as some of the comments presented are very much inaccurate. One can quit one’s job and be eligible for unemployment under special circumstances. For instance, if you are “Forced to Resign Due to a Constructive Discharge.” What that means is the environment in which you were working in was so harsh that you could not work for that employer anymore. A couple of things have to happen first. You must have some kind of documentation that you’ve brought these problems up to your employer and nothing was done. You have to show malice on the intent of the employer(which is easy to do in many legitimate situations). Also you have to then present the letter of discharge. You will then have an investigator call you as well as your employer to verify certain things and their(the investigator) assessment will be the final say. I have seen this situation unfold plenty of times. Sometimes employers feel that they can act anyway they want to their employees. It is not right at all. I am a small business owner but know what it was like to work for employers like that.

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