Knowing Your Employee Rights (If you get Laid Off)

Losing your job can be an incredibly stressful and painful time.  Fortunately, we have laws that protect us (or at least try to) from being taken advantage of by a company when we’re terminated or laid off from our job.  Knowing your rights as an employee and what you’re entitled to after a layoff should take immediate precedence over the pending job hunt.  By taking advantage of these company and government benefits, you can help reduce the stress of finding a new employer and easy some of the financial strain off of the process — even if the unemployment benefits tend to be meager in size.

We’ve put together a list of terminated employee rights and other useful things that you should be aware of if terminated from your job during the economic recession.

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Advanced Notice of a Mass Layoff

Some companies are required to give employees advanced notice of a mass layoff in order for terminated employees to search for other jobs and financially prepare themselves.  The Worker Adjustment and Retraining Notification Act (WARN) requires that if an employer with at least 100 employees is shutting down or laying off at least 50 employees, they must give terminated employees 60 days of advanced notice.  This also applies to companies terminating 500 or more employees — regardless of company size.

There are, however, some exceptions to this one.  If you accept another job during this 60 day period, it’s treated as if you willfully left the company, and your current company is no longer responsible for compensating you during that warning period.

State Unemployment Benefits

Unemployment benefits are available to any U.S. citizen laid off or fired from their job.  These benefits are calculated by taking 1/26 of your “high calendar quarter wages”.  This means that whatever calendar quarter holds your highest quarter earnings, 1/26 of that amount will be dispersed to you in your weekly unemployment check.  However, like most government programs, there is a maximum on the amount a person can receive.  The current cap in New York state is $405.  Employees are eligible to receive benefits for up to 12 months — this is referred to as your benefit year.

COBRA health insurance

Whenever a person is terminated from their company, the company is required by law to offer an employee their  health insurance policy at their current group rate.  This is called a “COBRA” plan, and while generally less expensive than individual health coverage, it is typically more expensive than what you would normally pay out of pocket while working, since most employers tend to cover a portion of their employee’s insurance premium.

*Editor’s Note:  Check out more health insurance options in NYC for the unemployed and underinsured.

Quick Payment of Final Check

State laws vary on this matter, but currently in New York state, a terminated employee has a right to their final paycheck on the company’s next scheduled payday.

Compensation for Accrued Vacation Time

According to NY State Department of Labor laws,  ” If an employee has earned vacation time — and there is no written forfeit policy, the employer must pay the employee for the accrued vacation.”  A forfeit policy is a clause that is added in to an employee’s employment contract when starting a new job.  For this to be valid, the employer must have notified the employee in writing of any and all conditions pertaining to their vacation time.

This also pertains to other fringe benefits such as holiday pay, paid sick leave, expense reimbursement, and anything else agreed upon by the employer and the employee. If you’re currently in the throes of trying to obtain your rightful compensation from your employer, you can click here to be taken to the NYS Dept. of Labor’s Claim for Unpaid Wage Supplements.  This will give you more information on what action you can take to make sure you receive your appropriate compensation.

Obtain or Rollover Earned Retirement Funds

Retirement funds are a little tricky.  They mostly depend on what sort of plan your employer offers (401K, Defined Benefit, Defined Contribution) and what the exact plan provisions are.

401(k)’s are the easiest to maneuver because they can be easily rolled over into a bank IRA.  And if your balance is less than $1,000, they can write you a check for the balance.

With pension plans, some companies are able to distribute a lump sum payment if the account balance is over $5,000.  If not, your payments will begin coming to you when you reach the plan’s retirement age — normally 65.

**Something to note:  If you’re planning on using some of your retirement funds for living expenses while job hunting, you may want to reconsider.  401(k)’s and pensions are subject to a 10% penalty if you’re under the age of 59 1/2, and depending on the amount you withdraw, could eat up a good portion of your retirement.

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