He refiled five days after the waiting period ended - and the math changed everything
A two-part severance payout left a worker stranded between eligibility windows - and now an appellate court says the state needs to take another look.
The worker’s employment ended on August 31, 2022. Under a confidential separation agreement, he received his severance in two lump sums: one on September 30, 2022, and another on January 13, 2023.
He didn’t file for unemployment insurance until September 18, 2023 - more than a year after his last day.
That gap set the clock ticking in the wrong direction.
New York’s unemployment system uses a “base period” - a window of recent earnings history - to determine whether someone qualifies for benefits. When the worker filed in September 2023, the Department of Labor calculated his base period and found he had earned wages in two quarters.
But there was a problem. Because the severance payments counted as dismissal pay, New York law made him ineligible for benefits during a waiting period - from September 18, 2023 through February 11, 2024. He was told to come back once that window closed.
He did. On February 17, 2024, he filed again.
Here’s where it stung. The new filing date shifted the base period forward. Under the recalculated window, the worker no longer met the minimum earnings requirement. The Department denied the claim. An administrative hearing judge upheld the denial. The Unemployment Insurance Appeal Board agreed.
The worker appealed to the Appellate Division, Third Department, raising several arguments.
Two didn’t land. The court found his challenges to the original October 2023 severance determination were out of play - he had never requested a hearing on that determination at the time, so he couldn’t raise it now. The court also rejected his argument that the severance should have counted as regular wages, noting that New York law expressly excludes dismissal payments from that definition.
But one argument stuck.
The worker argued that his September 2023 filing should have been treated as his original claim - meaning that once the severance waiting period expired, benefits should have started flowing under the base period calculated back in September 2023, not the less favorable one triggered by the February 2024 refiling.
The hearing judge had found that the February 2024 claim “superseded” the earlier one. But the Appeal Board had sidestepped the question entirely, dismissing it on procedural grounds without ever ruling on whether the Department was right to ignore the original base period.
The Appellate Division, in a unanimous decision dated November 5, 2026, said that wouldn’t do. The worker had properly raised the issue, and the Board needed to address it. Citing the limits of its own review power - “we are not permitted to surmise, speculate or substitute our judgment for that of the Board” - the court sent the matter back for a new decision within 60 days.
For HR teams designing separation packages, the case is a practical flag: the structure and timing of severance payments can quietly reshape a departing worker’s access to unemployment benefits in ways neither side may anticipate at the exit table.
The matter has been remitted to the Unemployment Insurance Appeal Board and is not yet finally resolved.
