Title 56 IDES RULES Part 2920
e) The fact that the period of announced shutdown for vacation or inventory purposes covered under this Section is
preceded or followed by a layoff due to lack of work or a period of vacation or holiday covered under Sections
2920.30 or 2920.35 does not affect the treatment of the payments received under this Section. The existence of the
situations described in subsections (d) and (e) might be relevant evidence, however, in deciding whether the
announced shutdown was truly for vacation or inventory purposes under subsection (c).
1) Example 1: The employer announced a one week shutdown for inventory purposes on June 1, effective for the
week beginning June 20. The individual was laid off for lack of work on May 3. If the employer's payments to
the individual for the week beginning June 20, otherwise satisfy the requirements of this Section, the fact that
the announced period of shutdown for inventory purposes follows a period of layoff due to lack of work does
not affect the status of those payments as wages under this subsection.
2) Example 2: Assume the same situation given in the preceding example except for the additional fact that the
individual is able to introduce evidence that the shutdown for the week beginning June 20, was not intended for
inventory purposes but rather was scheduled because of lack of work. In this situation, the provisions of
subsection (c) control in deciding whether the employer's payments to the individual are treated as wages under
Section 2920.30 Payments Made In Connection With Separation or Layoff As, Or In The Nature Of Vacation Pay,
Vacation Pay Allowance Or As Pay In Lieu Of Vacation
a) In situations other than those described in Section 2920.25, amounts that an employer pays, becomes obligated to
pay, or holds itself ready to pay the individual as, or in the nature of vacation pay, or vacation pay allowance, or as
pay in lieu of vacation shall be treated as wages provided that all of the following conditions are satisfied:
1) Such amounts are paid or payable "in connection with" the separation or layoff of the individual. Amounts are
paid or payable "in connection with" the separation or layoff of the individual for the purposes of this Section
whenever there is a relationship between such payments and the separation or layoff. Evidence of a relationship
is provided by the employer's pay plan or by the labor-management agreement.
A) Example 1: The individual is entitled to receive two weeks of vacation pay on the anniversary date of
employment which occurs on June 1. The employer is required to make payment for that date. The
individual along with other employees is laid off for an indefinite period beginning June 1. The individual
files for benefits for the week beginning on June 1 and the employer files a timely protest contending under
Section 610(B) of the Act that its liability to pay the individual's two weeks of vacation pay renders the
individual ineligible to receive benefits with respect to that two week period. The individual is not
ineligible to receive benefits under this subsection because the employer's liability to make such vacation
payments is not "in connection with" the layoff. No relationship exists between the employer's liability to
make vacation payments and the individual's layoff. The connection that does exist is purely fortuitous.
B) Example 2: Under the terms of the labor - management agreement, the individual is entitled to receive two
weeks of vacation pay on June 1. The labor-management agreement also provides that in the event of any
layoff or separation which occurs prior to June 1, the employer's liability for accrued vacation pay shall be
accelerated to the period immediately subsequent to the effective date of the individual's layoff or
separation. The individual along with other employees is laid off for an indefinite period beginning May
15th. If the protest is timely, the individual is ineligible to receive benefits under this subsection with
respect to the two week period beginning May 15, because the employer's liability to make vacation
allowance payments is "in connection with" the individual's layoff. The labor - management agreement
regarding the acceleration of vacation payments is conditioned upon the individual's layoff or separation.
The occurrence of the layoff on May 15 fulfills this condition. Accordingly, a connection exists between
the employer's liability to make accelerated vacation payments and the layoff of the individual, a
connection which is not merely fortuitous unlike the situation described in example 1.
2) Within 10 calendar days of the date the notice of the filing of an individual's claim for benefits is mailed or
within 10 calendar days of the date such vacation pay is paid or payable, the employer notifies the Director by
submitting either a "Notice of Possible Ineligibility" (BIS 0022) or a letter in lieu thereof which:
A) Designates the period for which the payments shall be allocated; and,
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