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Unemployment insurance (UI) benefits normally are available to individuals who are suffering from a lack of wages after being terminated from their job for reasons other than for misconduct, or who quit with good cause. Severance pay, however, is generally not considered a “wage” for UI purposes in California.
Because severance pay is not considered a wage, receipt of the pay will not disqualify an individual from receiving UI benefits under most circumstances.
For more information, read Wages Subject to Unemployment Insurance Taxes in the HR Library.