Accepting early retirement doesn’t mean automatic unemployment — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Accepting early retirement doesn’t mean automatic unemployment

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To streamline the work force, some employers encourage early retirement and may even include an inducement in the form of enhanced benefits. But unless the employer informs the employee her job is endangered unless she signs up, the employee is probably not eligible for unemployment compensation.
    That’s because employees who retire in lieu of being discharged may have a “necessitous and compelling reason” to sign up—but employees who merely accept a sweet deal aren’t in the same boat.
    Recent case: Margarita Davila, a social worker for the city of Philadelphia, signed up for a city early-retirement incentive program. Employees who participate in the program have to leave within four years. Employees who don’t take the deal lose enhanced retirement benefits, but not their jobs.
    Davila retired and filed for unemployment, arguing that she retired under necessitous and compelling reasons. But the Commonwealth Court disagreed. Because she was never in danger of losing her job, signing up and retiring didn’t make her eligible for unemployment. (Davila v. Unemployment Compensation Board of Review, No. 255 C.D. 2007, Commonwealth Court of Pennsylvania, 2007) 

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