My job was eliminated! Now what?

Despite an improving economy, layoffs are still occurring in Chester County and the surrounding area. There’s nothing quite as unsettling as being notified your job was eliminated – even if you knew it was a possibility. When it happens, there’s pressure to plan and make decisions, while dealing with a whirlwind of emotions. Take a breath and consider your next steps. Here are some of the decisions that will crop up immediately.

Severance Pay

Many employees ask me if they should sign a severance agreement. These agreements usually require employees to waive their rights to future claims or lawsuits in exchange for a cash payout or benefits.

Because severance payouts aren’t mandated by law, companies have a lot of free reign when they offer you a payout. But is it worth the trade off?

Before pulling out a pen and signing, here’s what to do.

Find out how long you have to sign the severance contract. First, scan the document and note the deadline. It’s important to have enough time to review the agreement and decide if the terms are fair.

Know your rights.  If you’re 40 or older, there are special rules covering severance agreements under the Older Workers Benefit Protection Act. One rule is that the agreement must be written in clear language – no jargon. Another rule states that you must be given at least 21 to 45 days to consider the agreement. This also gives you time to have an attorney review the agreement –  which employees have a right to do.  

Employees generally should take advantage of that allowance and have a lawyer who is experienced in employment matters review the circumstances of the termination and the terms of the agreement.  While the above rules only cover employees who meet the age requirement, many companies have similar terms included in severance contracts for younger employees.  It is beneficial to consult an experienced attorney who can assess the terms with respect to your individual situation. 

Consider if you would have a legal case. Do you feel you were singled out for the lay-off because of your age, gender, race or disability? If you think you have been discriminated against or treated unfairly, it’s important to discuss your concerns with an attorney before you sign.

Look for restrictions. In some severance agreements, there are restrictions on collecting unemployment benefits. For example, a severance agreement may specify that you can collect unemployment benefits only after the severance period has ended. Make sure you understand exactly what the restrictions are, so you can file any claims as soon as possible.  

Note that in most cases, companies will continue to pay severance even if you’re collecting a paycheck from another.  

You will want to look closely for non-compete clauses or similar revisions and have a lawyer review.  

Healthcare Benefits

Next, make a plan for healthcare benefits. When it comes to healthcare, there are legal requirements. You have the right to receive healthcare you have already paid for under the plan, often until the end of the month. In addition, you can be covered under COBRA, although you will have to pay the entire insurance premium. COBRA is often a good way to bridge coverage until you decide on a longer-term plan, or get another job.

Accrued Vacation Time

Every dime counts when there’s a loss of income. Be sure to check that you’ll be paid for unused vacation time as well as your salary through your last day. If it doesn’t add up, check with the HR director to make sure you’re paid what you’re owed.

Outplacement Services

Prepare to look for your next job. Before you cut ties with your employer, ask if they’ll sign a recommendation letter you write. You may have to settle for something more generic – but it doesn’t hurt to ask.  Since canned letters can set off a red flag, it is even better to come to terms about what the employer will say if a prospective employer calls.

Also, find out if you can have input on the announcement you’ll be leaving. Keeping a positive spin on the time you’ve had with your employer can make you more attractive to future employers.

Also, find out if you employer has outplacement services and take advantage of whatever they offer. 

While these are general guidelines, all employment situations are unique and individual circumstances should be reviewed with experienced counsel.  

Written by

Brendan D. Hennessy, Esquire is an experienced attorney and provides an assortment of legal services, focusing in the area of Employment Law.
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