Accept severance and lose jobless benefits

Occasionally, Help Wanted focuses on a single topic. Today's issue is unemployment benefits.

DEAR CARRIE: My husband's employer is offering voluntary separation packages because the business is downsizing.

The severance agreement would pay employees a salary for a certain number of months depending on their length of service. My husband is thinking of taking the package but is concerned that he might not be able to find a job before the severance money runs out. Would he be eligible to collect unemployment benefits if he can't find work? He is extremely confused since some co-workers have said that accepting the package would be the same as resigning and he wouldn't be able to qualify for benefits. Are they correct?

- Quit or Laid Off?

DEAR QUIT: They are correct. If your husband agrees to take the severance pay, that is the same as quitting. That is where the notion of "voluntary separation" comes in, though it can sometimes feel like a misnomer. Employees sometimes feel pressured to take the buyout packages and face an uncertain future if they don't. For example, those who refuse the package could be laid off without any severance benefits. Though the severance money looks great, the decision to leave a longtime employer is seldom an easy one.

DEAR CARRIE: My husband is an independent consultant with his own business. He had a long-term contract that ended in August 2009. Since then he has not been able to pick up any new work, certainly not for a lack of trying. After asking several people, attorneys and accountants about his eligibility [for benefits], we have gotten several different answers and are confused. The majority answer seems to be that he is not eligible so he has not even tried to file. We don't want to "play the system" and have never been on any public assistance in our lives. But the proverbial "six months' rainy-day money" is starting to run out. While I am still employed, my salary has been cut 20 percent. Are there any provisions in place to help jobless, self-employed consultants?

- Hanging by Thread

DEAR HANGING BY THREAD:The majority opinion is correct. Independent contractors don't qualify for unemployment benefits because they aren't covered by labor laws.

What's more, employers pay taxes to fund the unemployment insurance benefits program, which covers their eligible employees. As an independent consultant, your husband is his own employer.

Employers sometimes incorrectly classify their own employees as independent contractors, even while the companies continue to control such things as when and how employees will perform the work.

But since your husband has his own business, that isn't likely an issue.

Resources

For more on unemployment benefits go to:

labor.ny.gov/ui/claimant

info/beforeyouapplyfaq .shtm

For more on the employee

versus independent contractor relationship go to:

labor.state.ny.us/ui/dande /ic.shtm