McGowan v. Administrator, Unemployment Compensation Act
In McGowan v. Administrator, Unemployment Compensation Act, 153 Conn. 691, 220 A.2d 284, 286 (Conn. 1966), the Connecticut Supreme Court held that severance pay is not "wages" for purposes of determining whether a terminated employee qualifies for unemployment.
The court reasoned that, in the connotation of the statute, wages cease when employment does, severance pay cannot be considered wages. Severance pay is "a form of compensation for the termination of the employment relation, for reasons other than the displaced employees' misconduct, primarily to alleviate the consequent need for economic readjustment but also recompense him for certain losses attributable to the dismissal. Id.