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Unemployment fix for severance and termination pay moves forward

March 4, 2021 - On Tuesday, the Senate Small Business and Industry Committee, chaired by Sen. Eric Burlison, heard SB 183, sponsored by Sen. Cindy O'Laughlin.

Sen. Cindy O'Laughlin

Currently, a loophole in Missouri law allows individuals that have been terminated but have received severance pay to draw unemployment benefits while they are still made whole by the severance package. The bill would determine the length of time the severance pay would cover at the former employee's rate of pay, then start unemployment benefits after that time has passed.


"Even 'conservative' states like New York have fixed this loophole in the law," said Ray McCarty, president and CEO of Associated Industries of Missouri in his support testimony for the bill. "In fact, you fixed this once, then-Gov. Jay Nixon vetoed the bill, you overrode his veto, and the Missouri Supreme Court overruled it on technical grounds, objecting to the way in which the override vote was taken," he said.


Today, the bill was voted out of committee on a unanimous 7-0 vote. The bill will now be eligible for debate by the full Senate.

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