Business & Finance Careers & Employment

Can an Employee Collect Unemployment Benefits If He Resigned in Lieu of Termination?


    • Unemployment benefits are paid to you when you become unemployed through no fault of your own and are looking for a job. The unemployment insurance program is a joint effort by federal and state government, but your state law determines the requirements for collecting a check. You can receive benefits for about 26 weeks, with possible extensions, and it is funded by a tax imposed on employers. Generally, if you resign from a company that has work available to you, your unemployment benefit claim may be denied. Also, if you are terminated for misconduct, such as insubordination or theft, you will not be able to collect benefits. However, if you are fired for incompetence or laid off due to downsizing, your claim should be approved. If your benefits are denied, you can file an appeal with your state labor office.

    Resign in Lieu

    • If you have been told that you will be fired by your employer and you quit instead, you have resigned in lieu of termination. As long as you do not quit before you are fired for incompetence or laid off, you will be eligible to collect employment compensation benefits. If you know that your employment will be terminated because you cannot perform the job duties satisfactorily, then you are not leaving your job by choice. If you quit because you don't like your boss or your job, then you will not be allowed to collect benefits because you had a paying job that you forfeited.

    Quit in Anticipation

    • After receiving a less than satisfactory performance report, you may feel that your termination is imminent. Jumping the gun and resigning will not help approve your application for unemployment benefits. Your employer can claim that you were on a performance plan to bring your rating to the satisfactory level. Then it will appear to the state that you left gainful employment before any adverse action was filed against you and you will not be eligible for compensation benefits.


    • If you are unhappy in your job and would like to quit, wait until you have found another position. Your current employer may desire for you to voluntarily leave so that you will not be paid benefits. Your best chance of being eligible to receive unemployment compensation is to wait until you are formally notified, preferably in writing, that you are being terminated from employment. Then it is reasonable to understand that you resigned in lieu of termination for a valid reason.

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