Can You Collect Unemployment If You're Fired in New York?

Take a hypothetical. An office manager at a dental practice in Massapequa told the owner, in an email, that the hourly staff were not being paid for overtime. Three weeks later the manager was let go. The separation notice says “insubordination.” The practice has also offered severance, in exchange for a signed release. The manager’s first question is not about a lawsuit. It is about rent: can I collect unemployment?

It depends on why the job ended, and the reason the employer writes on the form does not decide it. Below are New York’s rules in the order they come up, ending with how an unemployment claim sits next to a claim against the employer, which our Long Island wrongful termination lawyer page covers. This is general information, not advice about any one claim.

Being fired does not disqualify you by itself

The Department of Labor’s own guidance lists the cases where a fired worker may be eligible, and one of them is a worker whose employer “discharged or fired you because you could not meet their performance or production standards, or their qualifications for the job.” The same page warns that you may be denied if you “were fired because you violated a company policy, rule or procedure, such as absenteeism or insubordination.” The line between the two is misconduct.

The statute states the rule this way. Labor Law § 593(3) provides that no weeks of unemployment “shall be deemed to occur after a claimant lost employment through misconduct in connection with his or her employment until he or she has subsequently worked in employment and earned remuneration at least equal to ten times his or her weekly benefit rate.” The statute does not define misconduct. Whether a particular firing was for misconduct is decided on the facts, first by the Department and then, if either side asks, by an administrative law judge at a hearing.

A separate subdivision covers crimes. Under § 593(4), a claimant who loses a job “as a result of an act constituting a felony in connection with such employment” is disqualified for twelve months, but only if “duly convicted thereof” or if the claimant “has signed a statement admitting” the act. Do not sign an admission at the exit meeting without knowing what it is.

The Department also says to “file a claim even if a former employer told you that you would not be eligible.” The employer’s opinion is not the determination. Consequently, a firing, even one the employer calls a policy violation, is a reason to file, not a reason to stay home.

Quitting is judged differently from being fired

Many people who leave work were pushed. The law still treats a quit on its own terms. Section 593(1) disqualifies a claimant after “voluntary separation without good cause,” again until the claimant earns ten times the weekly benefit rate in new work. The statute names “compelling family reason” as good cause, including verified domestic violence, the illness or disability of an immediate family member who needs care for “longer than the employer is willing to grant leave,” and following a spouse whose job moved to a place from which commuting is impractical.

If you resigned because you were told to resign or be fired, say that, and keep the message that told you. Consequently, before you sign or send anything that describes how the job ended, read it as the Department will.

Being fired is not the same as being fired for misconduct. A firing disqualifies you only if you were fired through misconduct on the job, right? So tell the Department of Labor the truth. Tell them the same thing every time because your employer is going to give their version too and at a hearing the judge is going to listen to both of you.

The flow below puts the eligibility questions in the order the Department asks them.

Four of the five questions are about money and conduct you can document. Gather the paper before you file.

How severance pay affects unemployment

New York calls severance “dismissal pay.” Labor Law § 591(6)(a) provides that “no benefits shall be payable to a claimant for any week during a dismissal period for which a claimant receives dismissal pay if such weekly dismissal pay exceeds the claimant’s maximum weekly benefit rate plus the claimant’s partial benefit credit.” The definition is broad: payments made “due to his or her separation from service of the employer regardless of whether the employer is legally bound” to make them. It excludes payments “for pension, retirement, accrued leave, and health insurance.”

Two details change the answer. First, a lump sum is not a way around the rule; the statute allocates it “on a weekly basis from the day after the claimant’s last day of employment.” Second, timing: the rule does not apply “during any weeks in which the initial payment of dismissal pay is made more than thirty days from the last day of the claimant’s employment.” The Department’s guidance adds that if severance stops, or drops below the maximum rate, you should file then.

Don’t sign a release without a lawyer. A severance agreement may also impact your unemployment benefits. If the weekly amount of your severance is greater than the maximum benefit rate available through unemployment and the first payment is made within 30 days of your last day at work, you will not collect unemployment for the weeks that are covered by the severance. Review the terms of the agreement to determine when payments are going to be made and in what amount, not just the total amount.

Severance is also taxed as wages, which our post on how employment settlements are taxed explains. Consequently, read a severance offer for three things: when the first payment arrives, how much it pays per week, and which claims the release gives up.

File in your first week out of work

The Department’s instruction is direct: “File your claim during your first week of total or partial unemployment. If you wait, you may lose benefits.” The employer has a duty here too. Labor Law § 590(2) requires every covered employer to tell a departing employee, in writing, of the right to apply for benefits.

Filing is the start, not the end. The first week is a waiting week, so the claimant “shall not be entitled to accumulate effective weeks for the purpose of benefit payments until he has accumulated a waiting period of one effective week,” under § 590(7). The Department says the first payment generally arrives “in two to three weeks from the time your claim is completed and processed,” and that you must certify every week.

If the claim is denied, the clock is short. A claimant “dissatisfied with an initial determination” may request a hearing “within thirty days after the mailing or personal delivery of notice of such determination,” under § 620(1)(a). The clocks below run from the day the job ends.

The weekly work search

The Department’s rule is concrete: “You must complete and record at least THREE work search activities each week to be eligible for benefits.” Applications, interviews, job fairs and Career Center appointments all count. Paper records must be kept for one year, and the Department checks the contacts you list.

The kind of work you must accept widens with time. Section 593(2) disqualifies a claimant who refuses, without good cause, suitable work. After ten weeks of benefits, a claimant without a recall date or a union hiring hall must accept work the claimant can do that pays at least 80 percent of the high-quarter wages and is not substantially below the prevailing wage. Consequently, keep the search real and written down; the Department treats a knowingly false work search entry as fraud.

What you tell the Department, and what it means for a lawsuit

Everything you say in the claim is part of the record, and the employer gets to respond. At a hearing, the Department’s guidance says, “you, your employer, and any witnesses for either side may testify,” the testimony is recorded, and the judge may hear the employer first. Say the same thing in the claim, in any questionnaire, and at the hearing.

New York keeps the unemployment case from deciding the employment case. Labor Law § 623(2) provides: “No finding of fact or law contained in a decision rendered pursuant to this article by a referee, the appeal board or a court shall preclude the litigation of any issue of fact or law in any subsequent action or proceeding,” except in cases about unemployment insurance itself. And § 537(1)(b) says unemployment insurance information “shall not be open to the public nor be used in any court in any action or proceeding pending therein unless the commissioner is a party to such action or proceeding,” with one narrow exception. Consequently, losing a misconduct hearing does not end a retaliation claim, and winning one does not prove it.

So unemployment is an administrative claim that is decided by the Department of Labor. It’s not a lawsuit and it doesn’t pay you damages. But if they fired you because you complained about a violation of the Labor Law then that may be retaliation under section 215. If you objected to another law, rule or regulation being violated then look at the whistleblower statute, which is section 740. And that’s a cause of action you can litigate for damages. Two different things, but you can have both.

Labor Law § 215 protects an employee who complains, reasonably and in good faith, that the employer is violating the Labor Law; a court may order reinstatement or front pay, lost compensation and fees, and “shall award liquidated damages” of up to $20,000; § 215 does not reach State or municipal employees. Labor Law § 740 protects an employee who discloses, or objects to, an activity, policy or practice of the employer that the employee reasonably believes violates a law, rule or regulation, and allows reinstatement or front pay, lost wages and benefits, fees, a civil penalty, and punitive damages for a willful, malicious or wanton violation. If the complaint was about discrimination, Executive Law § 296(7) applies as well. Our post on the retaliation standard after 2019 explains how those claims are proved. The two-year limits for § 215 and § 740 run on their own clock, separate from any unemployment deadline.

Back to the office manager in Massapequa

The office manager should file this week, whatever the separation notice says. “Insubordination” is the employer’s word; whether the firing was misconduct under § 593(3) is the Department’s question, and the manager can answer it with the overtime email and the dates. The severance offer needs two readings: its weekly amount against the maximum benefit rate, and its release against the claims it would give up. The retaliation claim under § 215 and § 740 is not decided by anything that happens at an unemployment hearing.

Our checklist for the first 24 hours after a wrongful termination lists what to save before access to the work email ends.

Sources

• New York Labor Law § 590, Rights to benefits
• New York Labor Law § 591, Eligibility for benefits (dismissal pay, subdivision 6)
• New York Labor Law § 593, Disqualification for benefits
• New York Labor Law § 620, Referees’ hearings
• New York Labor Law § 621, Appeals to appeal board
• New York Labor Law § 623, Decisions final
• New York Labor Law § 624, Appeals to courts
• New York Labor Law § 537, Disclosures prohibited
• New York Labor Law § 215, Prohibited retaliation
• New York Labor Law § 740, Retaliatory action by employers
• NYS Department of Labor, Before You File a Claim for Unemployment FAQs
• NYS Department of Labor, Dismissal/Severance Pay and Pensions FAQs
• NYS Department of Labor, The Hearing Process FAQs
• NYS Department of Labor, Work Search Requirements and Recordkeeping
• NYS Department of Labor, The Unemployment Claimant Benefit Process

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A separation notice is the employer’s version of how the job ended. The unemployment claim and the employment claim are each decided on the facts, in their own forum. Our employment law practice handles the claim against the employer.

If you were fired after complaining about unpaid wages, discrimination or another violation of the law, call (516) 750-0595 with your termination letter in hand, or request a free case review.