Q. I have an employee who is quitting to look for better work. He will be short on income in the interim period. Should I give him benefits as if he was fired in order to help him out?
A. Helping out an unemployed person, or any needy person, is a wonderful act of kindness. The Torah commands:
If there will be a needy person from among your brothers, in one of your gates in your land which the Lord your God gives you, don't harden your heart and don't close your hand to your needy brother. Surely open your hand and lend him whatever he is lacking for his needs. (Deuteronomy 15:7-8).
We see from this that there is a commandment to provide for the poor person "whatever he is lacking". But we also see that the verse makes reference to a loan, not a donation. It seems that a loan is preferable for some reason.
Maimonides explains why a loan is preferable to a donation, and provides a general principle for evaluating different levels of charitable giving:
There are eight levels of charity, one above the other. The highest level, than which none is higher, is to strengthen the hand of the Israelite who is struggling by giving him a gift, or a loan, or a partnership, or giving him a job in order to strengthen his hand, so that he should need to ask others. (1)
Maimonides' second level is to give anonymously, so that the recipient isn't ashamed before his benefactor.
So we see that the main consideration is the recipient's dignity -- that he shouldn't have to ask or feel ashamed before his benefactor. From this point of view a government-sanctioned benefit is certainly better than a charitable donation. These benefits are generally considered an entitlement, rather than a donation.
In fact, there is a special advantage to this specific entitlement. The Torah tells us of a special kind of "severance pay", the gift given to an indentured servant when his term is over (Deuteronomy 15:13-14):
And when you send him free from you, don't send him empty-handed. Surely grant him from your flock, and your granary, and your winepress, which the Lord your God blessed you, give him.
The Sefer HaChinukh suggests that even though today we don't have indentured servants, it is a nice idea nowadays also to give a parting gift.
However, it seems to me that the highest level of charity is to give a person a job. The Talmud tells us:
Rabbi Shimon ben Lakish says, a loan is preferable to a donation, and a partnership better than all. (2)
Therefore, it seems to me that to the extent this person is in need of income, you are already fulfilling your obligation to him at the highest possible level – you are giving him a job. If he wants to quit in order to find a better job that is certainly his right and privilege, but it doesn't make him needy. If the income he is getting now is adequate to keep him from being considered needy, then I think the best course of action is just to make clear to him that you are happy to keep him on. If he truly needs the income, then you are getting a good worker, and he is getting needed income in a way that has no shame whatsoever. I don’t think there is any reason why you should trade the highest level of charity for a lower grade.
The exception would be if the income you can offer him is simply not adequate for him to support his family at a decent level. Then helping him along with a severance benefit until he can find a sustainable position would indeed be the highest level of charity you could provide.
SOURCES: (1) Maimonides' Code, Gifts to the Poor 10:7 (2) Babylonian Talmud Shabbat 63a