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New Rules on Severance Pay and No Call/No Show Terminations Top the Big Changes in Connecticut Unemployment Compensation Law for 2024

Collecting unemployment compensation while receiving severance pay and the counting of absences for no call-no show terminations are the two most significant changes to Connecticut’s Unemployment Compensation Law that kicked off on January 1, 2024. The changes are the result of a 2021 law, Public Act 21-200, aimed at improving Connecticut’s unemployment fund solvency. Among the changes: 

 

Severance Payments and Unemployment Compensation

 

Employees being permitted to collect severance pay while at the same time collecting unemployment benefits has been a baffling concept for Connecticut employers.

 

Prior to January 1, 2024, if an employer offered an employee severance pay in exchange for the employee’s signing a release of potential legal claims against the employer, the employee could collect severance payments and unemployment payments at the same time. 

 

As of January 1st, employees will be disqualified from unemployment benefits for any week covered by the severance payment.   

 

No Call/No Show: Counting Absences for Willful Misconduct  

 

The law also makes a significant change to employees who simply stop working but fail to notify their employers of the absences--what is commonly known as “no call-no show.”

 

By law, employees fired for willful misconduct are ineligible for unemployment compensation. A claimant fired for willful misconduct based on absence can be denied benefits only if he/she is absent from work without good cause or without notice for three separate instances within a twelve-month period. 

 

Prior to January 1st, the law defined an instance as “one day or two consecutive days.” For consecutive days of absence, this meant that two consecutive days counted as one instance of absence, three consecutive days counted as two instances of absence, four consecutive days counted as two instances of absence, and five consecutive days counted as three instances of absence. Accordingly, an employee would need to have been absent without cause or without notice for 5 days in a row before the absence would be considered “willful misconduct.”

 

Under the new law, for separations occurring on or after January 1, 2024, where an absence without good cause or without notice continues for two or more consecutive days, each day will constitute a separate instance of absenteeism. Accordingly, employees terminated due to absence on or after January 1st, will only need to have had three consecutive absences without good cause or without notice for the absences to constitute willful misconduct.

 

Other Changes to Unemployment

 

In addition, effective January 1st:

 

·     The Act increases the taxable wage base from $15,000 in 2023 to $25,000 in 2024. It will be indexed to the federal Employment Cost Index thereafter. While the act decreases the minimum tax rate and minimum experience rate, the effect of the increase in the taxable wage base will likely be employers paying more in unemployment costs. 

·     The maximum unemployment benefit rate will be frozen during the four years from October 2024 through October 2028. 

·     A claimant’s receipt of accrued vacation pay at the time of dismissal will not disqualify the claimant from receiving unemployment benefits, if otherwise eligible. However, vacation pay issued to a claimant during a shutdown period will result in a disqualification or reduction in the unemployment benefits. 

·     The minimum weekly unemployment benefit payment increased from $15 to $40 and will be subsequently indexed annually due to inflation. However, the minimum benefit will revert to $15 when the federal government provides a fully federally funded supplement to the individual’s weekly benefit amount.

The act also provides benefits paid to a claimant through the state’s voluntary Shared Work program during periods of high unemployment will not be charged to experience rated base period employers.

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