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Patrick, Esq.
Patrick, Esq., Lawyer
Category: California Employment Law
Satisfied Customers: 12932
Experience:  Significant experience in all areas of employment law.
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I am recieving EDD disabilty. Since this began on Sept 18th,

Customer Question

I am recieving EDD disabilty. Since this began on Sept 18th, my employer ARAMARK lost the contract for the account in which I worked and I have become unemployed as well as being disabled. ARAMARK has stated that I will recieve a serevance but that they are holding it because releasing it will jeopardize/nullify my diability as I will be severed an employer. However, EDD has told me that, if I recieve the severance in one lump sum, it does not affect my claim. Can you clarify who is correct.
Submitted: 5 years ago.
Category: California Employment Law
Expert:  Patrick, Esq. replied 5 years ago.
Hello and thank you for entrusting me to answer your question.

The EDD provides that a claimant will be ineligible to continue collecting SDI if they are no longer "suffering a loss of wages." Thus, the question is whether a severance payment is a payment of "wages" pursuant to this rule.

Under most circumstances severance pay is not deemed wages for the purpose of obtaining benefits from the EDD in California. The key is whether or not the payment is considered to be for past services performed or as a supplement or assistance while the employee looks for new work versus continuing pay.

There is an extremely informative and comprehensive discussion of this issue by the EDD that can be found at: Admittedly, that discussion addresses severance in the context of receiving unemployment benefit, but the exact same principles should apply.

Further, if the EDD has specifically told you that the severance will not affect your SDI eligibility, you can most likely rely on that statement.

I sincerely hope that this information helps you and I wish you the very best of luck. Bear in mind that none of the above constitutes legal advice nor is any attorney client relationship created between us.

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