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, you must learn how to negotiate a severance and get laid off instead if you want to collect 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.
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!
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 five times and doubled in size to 200 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.