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The Programs and Resources that Can Make Losing Your Job Not as Bad as it Seems

Young businessman climbing grey steps on sky background

Depending on how it happens, losing your job can be traumatic, shocking, demoralizing, and emotionally devastating. Whatever the circumstances, it also creates financial stress as you face monthly bills without a steady source of income — while investing a great deal of energy and resources in finding another job.

Young businessman climbing grey steps on sky backgroundIt’s essential to get past those negative feelings as quickly as possible so you can focus on the important work of determining your next career move. Certain laws, programs, and safety nets can help you through the trying days and weeks immediately after a job loss. It’s important to know what’s available and how it can help you. Here’s an overview, but if you have specific questions or feel your former employer is not living up to their obligations, it may make sense to get professional advice.

Outplacement Services

In order to help you move on to your next job quickly and smoothly, many progressive companies offer outplacement services, like the Five O’Clock Club. These services can help support you through your job search with career counseling, peer support, networking and more. If your former employer doesn’t automatically offer outplacement services, you can – and should – request this valuable transitional service. We’re here to help with any questions you may have!

Health insurance

If you’ve been covered under an employer-provided health-care plan, federal law entitles you to extend that coverage up to 18 months after your date of termination. Called COBRA, this coverage typically costs far more than the monthly premium you paid while employed. That’s because most employers pay a larger portion of the total monthly premium than the employee does. Under COBRA, you pay the total amount and then some, but going without health insurance is not even an option; a single uninsured hospital visit can lead to financial ruin, so find the money to pay for COBRA.

You’re entitled to continue whatever health coverages you had while employed, including medical, dental, vision, and prescription drug coverage. Certain time limits apply, so ask about COBRA immediately and be sure your former employer’s HR department provides you with all the paperwork in a timely manner.

Pension

Few companies offer pensions anymore (most opting for 401(k) programs), but if yours did and you were vested for any portion of it, you’re entitled to that money, no matter the reason for your termination. Read the Summary Plan Description for your pension plan to learn how to file a claim for the money you’re entitled to. Likewise, your 401(k) is yours, including whatever portion your employer paid into it in matching funds. Talk to a financial professional about the best way to handle your 401(k) after a termination.

Severance Pay

No law says your employer has to offer you severance, but many do and those that do generally have an established policy for how much severance they will pay and how they will pay it. That said, severance may be negotiable, so it’s important to understand what your former employer is offering. Many employers will respond favorably to a well-reasoned request for fair severance.

If your employer has a written severance policy and you don’t believe they are offering you severance in accordance with their policies, you may have a claim under the Employee Retirement Income Security Act (ERISA). Ask for a copy of the company’s ERISA Summary Plan Description.

Your Final Paycheck

Most companies pay in arrears, so that means if you’re let go on Friday, your employer owes you a final paycheck for the preceding week (or two weeks if you’re terminated at the end of a pay period). Most states have protections in place through their Departments of Labor that allow you to file a complaint if an employer withholds your final paycheck. Likewise, you’re entitled to unpaid commissions for any work you’ve done.

Unemployment Compensation

If you were not “fired for cause” and you didn’t quit, you should be entitled to unemployment compensation. You file for unemployment benefits at your local unemployment office, and your employer has the right to contest benefits. While it’s unlikely that an employer will contest benefits if you were laid off or not fired for cause, it could still happen, and in that case you can appeal the denial of your claim. Keep in mind if you’re receiving severance that will stop if you get another job before it runs out, you may not be eligible for unemployment benefits. Check with the Unemployment Office if you’re not sure.

Losing a job is usually an emotional experience, but once the initial shock fades, you may find you’re better off than you thought. What’s more, you can decide to view your job loss as an opportunity to re-invigorate your career path, make new networking connections, and find an even better job than the one you lost.

 

 

 

 

 

 

 

 

 

 

 

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