In the BLS report the statistics showed a temporary layoff of 18.1 million people and a permanent job loss of 2.0 million.
Some of these individuals have never experienced an involuntary job loss in their lifetime. They are struggling with the demands of a family and the fear that their job might not ever return.
For many the lifeline of an unemployment check is just that – a slim lifeline that helps until they are able to get their life back in order.
As an employee you may never have heard of a Supplemental Unemployment Benefits Pay Plan – or SUB-pay plan. The concept is not new and has been around since the 1950’s
In the past, when an employee received severance payment, that individual might not be able to file for unemployment benefits. And that lump sum severance payment could be subject to taxes as taxable ‘wages’.
The SUB-pay plans were plans offered by employers that structured the severance payment so that employees could apply for unemployment benefits.
In the event of termination, an involuntary lay off, there would be no lump sum payment.
Rather a link would exist between the SUB pay plan benefits paid by the employer and that state’s unemployment compensation.
In simple terms, the severance payments were made in ‘installments’ that supplemented the state unemployment benefits. No lump sum payments were permitted under SUB-pay plans.
It is beyond the scope of this article to discuss the various regulations of the SUB-pay plans.
For two excellent articles about SUB plans, go to:
shrm.org (Society for Human Resource Management) the article titled: ‘What is an unemployment SUB plan and how can it help my employer save money during a reduction in force?
And.. The Advantages and Challenges of Supplemental Unemployment Benefit Plans
(April 14, 2020) (Ogletree.com) Authors listed: Alexandra L. Orsini, Stephanie A. Smithey, Michael K. Mahoney. Eric D. Penkert (Ogletree Deakins)
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