Illinois Administrative Code
Title 56 - LABOR AND EMPLOYMENT
Part 2840 - CLAIMANT'S REASON FOR SEPARATION FROM WORK
Subpart B - VOLUNTARY LEAVING
Section 2840.125 - Early Retirement Or Employment Buyout Packages
Universal Citation: 56 IL Admin Code ยง 2840.125
Current through Register Vol. 48, No. 38, September 20, 2024
a) An individual who accepts his employer's offer of an early retirement or employment buyout package and leaves work according to the terms and conditions of the offer is ineligible under Section 601 of the Act unless, at the time the offer is accepted:
1) the individual knows or reasonably
believes that, within the proximate future, his employment will be terminated
by the employer under terms and conditions substantially less favorable than
the terms and conditions of the offer, or
2) the individual knows or reasonably
believes that his employment will continue, in the proximate future, but under
terms and conditions substantially less favorable than the terms and conditions
of his employment immediately prior to the offer, or
3) the individual knows that a layoff will
follow if a sufficient number of employees do not accept the offer of an early
retirement or employment buyout package and the individual accepts the offer to
avoid the layoff of another employee.
b) The circumstances under which an individual may be found to have the reasonable belief required by subsection (a)(1) and (a)(2) above include but are not limited to circumstances in which the individual seeks but does not receive assurances from the employer that his employment will not in the proximate future be terminated under terms and conditions of the offer or that the terms and conditions of his employment will not in the proximate future become substantially less favorable than the terms and conditions immediately prior to the offer, as the case may be.
1) Example: An employer operates a plant that
has consistently earned a profit. The employer offers an early retirement
package. There is no indication from the employer that the offer is intended to
avert layoffs and there are no rumors to that effect within the plant. An
employee at the plant accepts the offer and applies for unemployment benefits
after separating from the employer. These facts alone do not establish the
reasonable belief required by subsection (a)(1) or (a)(2) above; the individual
is ineligible under Section 601.
2)
Example: An employer who operates a plant with 800 employees offers an early
retirement plan on October 1 and indicates that, if by December 31 of the same
year fewer than 150 employees have accepted the offer, the employer may begin
laying off "nonessential" employees in no particular order of seniority, with
no benefits. On October 2 of that year an employee at the plant seeks but does
not receive assurances from the employer that she is considered "essential,"
whereupon she accepts the offer. Without other evidence to the contrary, these
facts establish the reasonable belief required by subsection (a)(1) above; the
individual is not ineligible under Section 601.
3) Example: An employer who operates a plant
with 900 employees announces it intends to downsize by 25 percent and offers an
early retirement package on October 15. Rumors circulate through the plant
that, if a sufficient number of employees do not accept the offer by the end of
the year, layoffs will follow, with no benefits, although the employer has made
no announcement to that effect. The employer is aware of the rumors and does
not take any action to dispel them. An employee seeks but does not receive
assurances from the employer that he would not be laid off. Without other
evidence to the contrary, if the employee accepts the offer, these facts
establish the reasonable belief required by subsection (a)(1) above; the
employee is not ineligible under Section 601.
4) Example: An employer operates a plant with
1,000 employees. On September 15, the employer offers an early retirement
package to its most senior workers. Thereafter, rumors circulate throughout the
plant that the employer is considering eliminating and restructuring jobs. In
conversation with the employer, a senior employee is assured the employer has
no plans to eliminate or restructure his job. However, the employer does
observe that, if the next few years are as unprofitable as the current one,
everybody's job could be at risk and the employer might not be able to offer
early retirement packages as generous as the one now being offered. Troubled by
the employer's observation, the employee accepts the offer. These facts alone
are not sufficient to establish the reasonable belief required by subsection
(a)(1) above; the employee is ineligible under Section 601. An employer's
abstract statement of concern over what the future may bring is too speculative
to establish a reasonable belief that the employee's job will be affected in
the proximate future.
5) Example:
An employer asks for "volunteers" to be laid off, explaining that each
volunteer will receive two months of wages and extended health insurance
coverage upon separation. The employer indicates that, if 250 volunteers are
not found, it will lay off, with no benefits, a number of employees equal to
the difference between 250 and the number of volunteers, irrespective of
seniority. Any employee volunteers after seeking but not receiving assurances
from the employer that he would not be laid off. Without other evidence to the
contrary, these facts establish the reasonable belief required by subsection
(a)(1) above; the employee is not ineligible under Section 601.
6) Example: On January 2, an employer offers
an employee an early retirement package. The offer is effective through April
15 of the same year. There is no indication from the employer that the offer is
intended to avert layoffs and there are no rumors to that effect within the
workplace. The package would provide the employee with a greater pension than
would otherwise have been available to her had she immediately retired and
would provide the employee with the same medical benefits that are currently
provided to her as a full time employee, including full medical insurance for
the employee's sick husband. The employer indicates to the employee that, if
she does not accept the offer, the employer will, as of April 16, discontinue
medical insurance for her husband. These facts establish the reasonable belief
required by subsection (a)(2) above; the employee is not ineligible under
Section 601.
7) Example: On January
2, an employer offers an employee an early retirement package. The offer is
effective through April 15 of the same year. There is no indication from the
employer that the offer is intended to avert any layoffs and there are no
rumors to that effect within the workplace. The package would provide the
employee with a greater pension than would otherwise have been available to her
had she immediately retired and would provide full medical insurance for the
employee and her sick husband, even though the employer does not currently
provide medical insurance for employees, retirees or the families of employees
or retirees. There is no indication that the terms and conditions of the
employee's employment will change if she does not accept the offer, although by
not accepting the offer, she will forego any medical insurance furnished by the
employer. The employee accepts the offer. These facts do not establish the
reasonable belief required by subsection (a)(2) above; the employee is
ineligible under Section 601.
8)
Example: An employer who operates a plant with 1,000 employees asks for
"volunteers" to be laid off, explaining that each volunteer will receive two
months of wages and extended health insurance coverage upon separation. The
employer indicates that, if 250 volunteers are not found, it will lay off, with
no benefits, a number of employees equal to the difference between 250 and the
number of volunteers. An individual who, because of his seniority, knows he
will not be laid off, volunteers to be laid off in place of his son, who has
little seniority. According to subsection (a)(3) above, the individual is not
ineligible under Section 601.
c) An individual who accepts his employer's offer of an early retirement or employment buyout package and leaves work according to the terms and conditions of the offer and is not ineligible under Section 601 of the Act may still be ineligible under other provisions of the Act.
1) Example: An employer announces it
intends to downsize by 25 percent and offers an early retirement package which
includes a generous pension package financed solely by the employer. Rumors
circulate through the plant that, if a sufficient number of employees do not
accept the offer by the end of the year, layoffs will follow, with no benefits,
although the employer has made no announcement to that effect. The employer is
aware of the rumors and does not take any action to dispel them. An employee
seeks but does not receive assurances from the employer that he would not be
laid off. Without other evidence to the contrary, if the employee accepts the
offer, these facts establish the reasonable belief required by subsection
(a)(1) above; the employee is not ineligible under Section 601. However,
because the individual's retirement pension is financed solely by the employer,
it will be 100% disqualifying income for each week for which the individual
qualifies for the pension.
2)
Example: An employer announces it intends to downsize by 25 percent and offers
an early retirement package. Rumors circulate through the plant that, if a
sufficient number of employees do not accept the offer by the end of the year,
layoffs will follow, with no benefits, although the employer has made no
announcement to that effect. The employer is aware of the rumors and does not
take any action to dispel them. An employee seeks but does not receive
assurances from the employer that he would not be laid off. Without other
evidence to the contrary, if the employee accepts the offer, these facts
establish the reasonable belief required by subsection (a)(1) above; the
employee is not ineligible under Section 601. However, the individual decides
that he will retire from the labor force and relocate to Florida. This
individual will be ineligible for each week during which he is not able to,
available for or actively seeking work.
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