Laid Off

Being Laid Off? Know Your Rights As An Employee

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During the recent financial crisis, many companies ran into difficult times. Businesses struggled to stay afloat and employees were laid off. In the post-recession period, many companies are downsizing when their business does not meet set expectations. Today, employees are also familiar with the idea of pink slips, and they know that their individual performance and company’s financial health must be right to prevent any shocks.

Being Laid Off? Know Your Rights

While layoffs have become quite common in all industries today, many employees do not know that the law safeguards their interests and welfare. Here are some laws and policies that every employee should be aware of when he/she is asked to leave:

Final Pay

Final pay laws differ from one state to another. The general norm is to issue the final paycheck as soon as the employment ends. The final pay includes the wages an employer owes to its employees on the last day of their work. In addition, it covers overtime, bonuses, expense reimbursements, commissions, and vacation pay, if applicable. The law does not cover sick leaves in the final pay. Some employer, however, pay it to prevent the misuse of sick leaves.

Final pay may not include severance pay for the layoff. Further, employers are not required to issue severance pay by law. It depends on the employment contract or terms of a separation agreement.

Severance Pay

Severance release refers to the money an employee receives along with salary and other payments owed by the employer. A severance package is generally combined with other benefits like health insurance under COBRA. It is not mandatory for the employer to provide severance pay for any layoff unless a collective bargaining agreement is signed and put in place.

Severance packages are usually based on the duration of service and the employee’s current reimbursement. To receive the severance pay, the employee should sign a severance or separation agreement. The agreement defines the terms of layoff as well as a release clause.

Health Insurance

After being laid off, you may still be able to purchase COBRA extended health insurance benefits. If you are being covered by a group health insurance plan, then your employee layoff rights can make you eligible for extended health insurance benefits. COBRA is a Federal Act which makes it compulsory for employers with more than 20 employees to provide extended health insurance benefits in certain situations. Further, the Act qualifies layoff as a qualifying situation.

Discrimination Laws

It is very important to pay attention to what your employer tells you when he informs you about your layoff. For instance, if you are told that you are too old for the job, it can be deemed as discrimination. However, there are various aspects to it. A highly paid senior worker can be fired as the employer will be able to cut costs and hire two people for the same salary.

Federal Laws prohibit discrimination during layoffs. According to Title VII of the Civil Rights Act, 1964, employers cannot make employment decisions based on religion, race, national origin, sex, or pregnancy. Title I and Title V of the Americans with Disability Act, 1990 states that people with disabilities cannot be discriminated upon.

If you feel you have been a victim of discrimination, get in touch with a lawyer or contact the Equal Opportunity Employment Commission (EOEC). The EOEC will listen to your plea, question your employer, take note of the situation and arrive at an informed decision.

By staying informed about your rights, you can ensure you receive all the benefits you are entitled to. If you don’t feel very confident, contact an attorney and get necessary information about your rights.

Photo Credit: Shutterstock

Andrew Deen

Andrew Deen is a contributor who writes and blogs in the field of higher education. He stays up to date on all things higher ed, including new program opportunities, career trends, and new technologies in the industry.

10 comments

  1. You should at least specify in the title that this article is for US employees only. This is an international forum at contributors should acknowledge that

  2. Visit a qualified labor lawyer and find out exactly what your rights may be in your situation, community, company, and state. I chose to take my chances in court and won an age discrimination lawsuit a few years ago. It took six years!!!

  3. I am trying to find out what this article is saying that a fifth grader will not know. Please when you guys will write an article, don’t wate other people time posting information that are redundant.

    • One thing I would recommend that they did not mention is the importance of proper grammar and spelling on the cover and resume. Based on the short example of your writing given, you would do well to pay close attention to those particular details.

  4. Great infomation. If you are working in an “at will” State, is an employer entitled to give an employee a reason for dismissal…contract of no contract?

  5. What if the company goes under, do different rules apply? They came to us suddenly, announcing they had no more money. We had worked a few days, most of us had vacation and personal days left, but we got nothing.

  6. when your employer informs you of a layoff and the severance agreement they provided states that you have no right to sue based on discrimination, or any other aspect what do you do? Three months after being laid off they bring in a lower level employee and later promote them into my former position. I have a severance agreement that states my company will sue me and demand all severance payments. I and others were treated very unfairly by an employer that wanted only hand picked directors that they personally hired.

    • annonymous in southern CA

      Right there with you. I was laid off at the beginning of February and I was even told that they would work to bring me back. They just hired someone into a position that I was totally qualified for – I literally held the position with the SAME company and I didn’t even receive a phone call to discuss the position. Yes, I applied through the website and I contacted the recruiter directly. The thanks I got was the form rejection email. Over six years with the company, countless hours, countless contribution and they completely slapped me in the face because I am over 40.

  7. Federal Laws prohibit discrimination during layoffs. According to Title VII of the Civil Rights Act, 1964, employers cannot make employment decisions based on religion, race, national origin, sex, or pregnancy. Title I and Title V of the Americans with Disability Act, 1990 states that people with disabilities cannot be discriminated upon.

    If you feel you have been a victim of discrimination, get in touch with a lawyer or contact the Equal Opportunity Employment Commission (EOEC). The EOEC will listen to your plea, question your employer, take note of the situation and arrive at an informed decision.

    That may be the Law, but good luck proving that in an employment at will state like Indiana!

    • annonymous in southern CA

      In the state of CA (also an “At will employment” state, the employer has to list the ages of people retained in the same positions where yours was eliminated. I just went through this a couple of months ago. My position was eliminated and I was the oldest of the team. No one that remained knows half of what I know, yet they let me get and retained 2 that are 18 years my junion. My options were to either accept my severance package and waive my rights to sue for descrimination or to refuse the package and take my chances in court. I took the package. Better to walk away.

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