New York Labor Law prohibits terminated workers from receiving unemployment benefits if they are receiving severance pay that exceeds the state’s maximum weekly unemployment benefit. That benefit is currently $405.00. This applies even if the severance payment is a lump sum. The new rule effects only terminated workers that apply for unemployment benefits after January 1, 2014. Employers must be aware that there are loopholes to this provision and employers need to review any standard severance agreements in light of this new rule.