Tuesday, February 09, 2016

UC - severance pay not "wages"

Ward v. UCBR – Cmwlth. Court – Febgruary 9, 2016

Severance pay not earned.  Held not to be “wages.”

Section 401(c) of the Law provides that “[c]ompensation shall be payable to any employe who is or becomes unemployed, and who . . . [h]as made a valid application for benefits with respect to the benefit year for which compensation is claimed.” 43 P.S. §801(c).

Section 4(w)(2) of the Law provides that: [a]n application for benefits filed after the termination of a preceding benefit year by an individual shall not be considered a Valid Application for Benefits within the meaning of this subsection, unless such individual has, subsequent to the beginning of such preceding benefit year and prior to the filing of such application, worked and earned wages in “employment” as defined in this act in an amount equal to or in excess of six (6) times his weekly benefit rate in effect during such preceding benefit year. 43 P.S. §753(w)(2) (emphasis added).

In Joyce v. Unemployment Compensation Board of Review, 548 A.2d 387, 388 (Pa. Cmwlth. 1988), this court determined that severance pay was not earned and, thus, may not be used to calculate a claimant’s earnings under section 4(w)(2) of the Law. Here, Claimant’s only income during the preceding benefit year came from his severance payments. Because severance payments are not earned, Claimant did not “work[] and earn[] wages in ‘employment’ . . . during such preceding benefit year.” 43 P.S. §753(w)(2). Therefore, the UCBR correctly applied section 4(w)(2) of the Law.


An unreported Commonwealth Court case may not be cited binding precedent but can be cited for its persuasive value.  See 210 Pa. Code § 69.414(b) and Pa. R.A.P.  3716

If the case is old, the link may have become stale and may not work, but you can use the case name, court, and date to find the opinion in another source (e.g., Westlaw, Lexis, Google Scholar)