Layoff Tips:10 Steps to Cope With a Job Loss
By Glass Krakower LLP
You just received notice that you are being laid off like millions of other Americans since the recession began last year. What do you do now? Here are 10 issues that you should consider before looking for a new job:
1) COBRA and Continued Health Coverage - The Consolidated Omnibus Reconciliation Act, known as COBRA, lets many employees maintain their health insurance for 18 months if they pay 102% of the premium. Under the new stimulus law passed by President Obama, unemployed former employees who qualify pay only 35% of their COBRA premium for the first nine months, with the government subsidizing the rest. Qualifying companies with group health plans are required by law to provide COBRA coverage to terminated employees.
2) Discrimination Claims - You should consider whether you fall within a protected category such as age, race, gender, national origin, religion, disability, and whether this protected characteristic (i.e. age, race, gender, national origin, religion, or disability) played a part in the decision to terminate your employment. Under state and city laws, additional categories are also protected, such as sexual orientation, marital status, previous arrest record, or genetic predisposition. Using such protected categories as a basis to terminate an employee is most likely unlawful and could potentially subject the employer to legal action.
3) Network - Go to mixers and networking groups. Don't be afraid to tell people you are searching for a new job! Think about self-employment and/or consulting opportunities, and/or use online resources such as ELance.com, oDesk.com, Guru.com and crowdSPRING.com for freelance work. There are plenty of online networking resources for this as well, including facebook.com, linkedin.com, and orkut.com. Also use simplyhired.com and Indeed.com as aggregate job-hunting sites in addition to NYJobsource.com, of course!
4) Noncompete/Nonsolicit/Confidentiality Obligations - Do not take company files or property and be careful what you download when you depart, as you may have signed an agreement upon inception of employment that could make you liable for damages if you take or destroy data or anything of value from the company. Check to see if you signed an employment agreement, restrictive covenant, or the handbook that subjects you to such obligations.
5) Outplacement Assistance and Reference Letter - These services may include a company-sponsored outplacement service (such as five o'clock club), a government-managed dislocated worker program, a community-based support group, or even a private job placement agency. A good reference letter from your former employer-especially one that you have input drafting-will be helpful to securing future employment.
6) Pension Rights/Rollover - Think about whether it makes sense to leave your 401k with your former employer or transfer the retirement funds into a private IRA. Be careful taking loans from the 401k as there are often steep penalties involved. Also consider whether you were close to vesting for certain benefits, as you may have a clam that you were laid off by the former employer with the intention to deny you benefits under the federal ERISA statute and comparable state laws.
7) Severance Package - If you are offered a severance package, 1 week of salary per year of service is a general rule of thumb, but there is no obligation of the Company to pay you any severance unless there is a formal severance plan in place (which is more common with some larger employers). There are special strict rules regarding waiving your claims under the Older Workers Benefit Protection Act (OWBPA) and Age Discrimination in Employment Act (ADEA) if you are over 40 years of age in terms of time for consideration of the agreement and notice requirements.
8) Unemployment Assistance - You should consider applying for state unemployment benefits as soon as you are eligible as it can take several weeks to receive your first payment. While payments may max out at about $400-$500 a week, depending on your state, they can help cover some expenses. With extended emergency benefits in this down economy, it may be possible to receive lengthier unemployment benefits than in prior years. The first $2,400 may be exempt from income taxes. An employee who resigns in lieu of being laid off may risk being denied benefits for voluntarily leaving their employment, and an employee who is fired for misconduct also may not be eligible for benefits.
9) Wage and Hour/Independent Contractor Issues - Employees may be improperly classified as exempt from overtime by their former employer even when they should have been entitled to overtime. In such an instance, the employee may be owed back-pay and additional damages which could add up to significant amounts of money if the situation occurred over a lengthy period of time or the employee worked many overtime hours. You can pursue this claim through the federal or state Department of Labor or through a private attorney. If an employee is misclassified as an independent contractor (e.g., the individual received a 1099 rather than W-2), you may have substantial claims for overtime pay and other backpay as well.
10) WARN rights - If you are part of a group layoff, the employer may have additional notice obligations, and you may be entitled to additional pay, under the federal Workers Adjustment Notification Act ("WARN"). Several states have mini-WARN acts as well.
This article was prepared by the law firm of Glass Krakower LLP, 20 Broadway, Ste. 1, Valhalla, NY 10595, 877-7GK-FIRM. The firm is experienced in all areas of labor, employment, and education law. This article is not legal advice and is not intended as legal advice, and is intended to provide only general, non-specific legal information. This article is not intended to cover all the issues related to the topic discussed. The specific facts that apply to your matter may make the outcome different than would be anticipated by you. This article does not create any attorney client relationship between you and the authors and/or publisher.
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