In today’s unpredictable business landscape, financial security is a growing concern for employees at every level. As companies adapt to economic shifts, restructuring, or temporary slowdowns, the threat of layoffs and furloughs can send anxiety rippling through the workforce.
While severance is a common safety net for executives, it’s often too costly to extend across the organization. But there’s another option: Supplemental Unemployment Benefit (SUB) Plans. These employer-funded programs offer a flexible, cost-effective way to support more employees—not just the elite—when work disappears, whether temporarily or permanently.
What Are Supplemental Unemployment Benefits (SUB)?
SUB Plans are employer-designed programs that provide financial support to workers who are laid off or furloughed through no fault of their own. Unlike severance, which can reduce or delay unemployment eligibility, SUB payments are classified as benefits, not wages. That means they can be layered on top of state unemployment insurance (UI) without interfering with a worker’s eligibility. Together, state UI and SUB pay can replace up to 100% of an employee’s regular wages.
A Smarter, Scalable Alternative to Severance
Many companies can’t afford to offer severance across the board, but they still want to do right by their people. SUB Plans offer a way to stretch limited dollars further, because payments:
-Only go to employees who qualify for and are receiving state unemployment
-Cease once the employee finds a new job
-Are not subject to payroll taxes
This makes SUB an attractive option during furloughs, where a full return to work is expected, or during longer layoffs where workforce reductions are necessary but costly to manage with traditional severance.
Supporting Stability, Loyalty, and Wellness
When employees know there’s a safety net in place, it lowers stress, builds trust, and shows that the company is thinking about everyone, not just a select few. This matters during downturns—but also day-to-day, as it contributes to an overall culture of care and transparency.
SUB Plans aren’t just a financial tool—they’re a human one. By extending support during furloughs and layoffs to employees at all levels, companies demonstrate a real commitment to equity, resilience, and long-term trust.