.12 Severance Pay, Dismissal Pay, or Pay instead of Notice of Termination.

A. Definitions.

(1) Employee Benefits Package. (a) "Employee Benefits Package" means any cash or in-kind contribution which is made by an employer to or on behalf of an employee or any dependent of an employee and which does not constitute wages paid to the employee.

(b) "Employee Benefits Package" includes but is not limited to an employer's contribution:

(i) To a health, medical, life, or disability insurance plan;

(ii) To a pension plan or retirement plan;

(iii) To a deferred compensation plan;

(iv) To an annuity plan;

(v) To a stock option plan; or

(vi) For dependent care assistance.

(2) "Severance pay" means the gross amount of severance pay, dismissal pay, pay instead of notice of termination, wage continuation, or other remuneration paid or payable to the claimant upon separation from employment.

(3) "Wage continuation" means any payment that consists of the same wage amount and employment benefit package that is paid to an individual when services are no longer being performed as was paid when services were being performed.

B. Deductible Severance Pay.

(1) Severance pay shall be deducted from benefits when the individual's former position has not been eliminated.

(2) Wage continuation shall be deducted from benefits even when the individual's former position has been eliminated.

(3) The Secretary shall allocate severance pay that is paid in a lump sum or in increments to a number of weeks following the date of separation, including the week during which the claimant was separated from employment. The Secretary shall allocate severance pay by:

(a) Calculating the entire amount of severance pay;

(b) Calculating the claimant's daily wage by dividing the claimant's last weekly wage by seven;

(c) Calculating the number of days to which the severance pay applies by dividing the total amount of severance pay by the claimant's daily wage; and

(d) Applying the severance pay to the days immediately following the claimant's last day of service.

(4) If severance pay allocated to a particular week is less than the claimant's weekly benefit amount, the claimant shall receive the difference.

C. Nondeductible Severance Pay. Severance Pay that is not wage continuation may not be deducted from benefits when the claimant's former position is eliminated and that position will not be filled, regardless of whether the claimant's former job duties are being performed by others.

D. Partial Earnings. Severance pay that is less than the claimant's weekly benefit amount may not be deducted pursuant to Regulation .10F of this chapter as partial earnings.

E. Severance Pay Reportable and Taxable. Severance pay is reportable and taxable for the purpose of the employer's contribution obligations under the Unemployment Insurance Law.