Severance pay is a monetary disbursement given to employers who have been relieved of their duties, either permanently or temporarily. The amount given is usually based upon a formula that takes into account the worker's seniority and position in the company, as well as other intangibles deemed important. Once the employee has been notified of his layoff, he is unemployed and begins to receive his severance pay. While he is looking for new work, he is eligible to apply for unemployment benefits. Unemployment compensation is funded via the mandate of the Federal Unemployment Tax Act (FUTA) of 1939. To qualify for unemployment benefits, a person must have been employed by any number of employers for a period of time (each state differs), and earned at least $1,500 in wages in a calendar year.