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House of Representatives
Session of 2015 - 2016 Regular Session


Posted: January 20, 2015 11:35 AM
From: Representative Thomas P. Murt
To: All House members
Subject: Unemployment Compensation Monetary Settlements
I plan to reintroduce legislation amending the Unemployment Compensation Law with respect to monetary settlements resulting from the early termination of an employment contract. My legislation would require that such payments be offset against any unemployment benefits to which a claimant may otherwise be entitled.

As many of you are aware, in 2012 there was a high-profile story involving a Philadelphia School District superintendent who received a large settlement (hundreds of thousands of dollars) from the early termination of an employment contract. This individual then proceeded to apply for unemployment compensation benefits. Under current law, this settlement money is not offset against unemployment compensation.

It is important to note that effective January 1, 2012, there was an offset provision in the law for receipt of severance pay. The problem is that monetary settlements may or may not be considered “severance pay” by the Department. My legislation seeks to make it clear that such settlement monies are considered to be severance pay and proposes a 100% offset of such monies.

I do not believe it is sound public policy to permit individuals who agree to “settle” an employment contract to then collect unemployment benefits with no ramifications. These individuals are hardly unemployed by no fault of their own. Taking into consideration the Legislature’s ongoing efforts to restore solvency to the Unemployment Compensation Trust Fund, the Commonwealth cannot afford to permit this type of activity.


Introduced as HB1035