Written by Pat Brown, MBA
Legal Protections and Wrongful Termination
Losing your job is stressful, but knowing your employee rights can help you protect yourself, access benefits, and take action if necessary. Layoffs can happen due to company downsizing, budget cuts, or restructuring, but employers must follow legal guidelines when letting employees go.
Below, we’ll cover:
✅ Your legal rights during a layoff
✅ Severance pay and unemployment benefits
✅ Wrongful termination claims
✅ How to protect yourself moving forward
1. At-Will Employment vs. Contract Employees
In the U.S., most workers are employed at-will, meaning an employer can terminate your job at any time for any reason—except for illegal reasons.
However, if you have an employment contract, your employer must honor the terms of your agreement, including notice periods and severance pay.
📌 Check your employment contract (if applicable) to understand your rights.
2. Worker Adjustment and Retraining Notification (WARN) Act
The WARN Act is a federal law that protects employees when large-scale layoffs or plant closures occur.
Under this law, companies with 100+ employees must provide:
✔ 60 days’ advance notice before a mass layoff or closure
✔ Pay for that 60-day period if they fail to notify employees
💡 If your company violated the WARN Act, you may be entitled to back pay and benefits.
📌 More info: U.S. Department of Labor – WARN Act
3. Severance Pay: Are You Entitled to It?
Severance pay is not required by federal law unless your contract states otherwise. However, some employers offer it as part of their company policy or a layoff agreement.
✅ Check your employee handbook for severance policies
✅ Negotiate your severance package if possible (you may get better terms!)
✅ Understand the tax implications of a lump sum severance
💡 If you’re offered severance, you may be required to sign a waiver agreeing not to sue—review it carefully!
4. Unemployment Benefits After a Layoff
If you’re laid off (not fired for cause), you’re likely eligible for unemployment benefits from your state.
📌 How to apply for unemployment:
1️⃣ Check your state’s unemployment office website (Find yours here)
2️⃣ Submit your application (online, by phone, or in person)
3️⃣ Provide necessary documents (past pay stubs, reason for termination)
4️⃣ Certify weekly to continue receiving benefits
💡 Tip: If your employer disputes your claim, you have the right to appeal!
5. Wrongful Termination: Were You Laid Off Illegally?
Even in at-will states, some layoffs are illegal. You may have a wrongful termination case if your layoff was due to:
🚨 Discrimination – If you were laid off based on race, gender, age (40+), disability, pregnancy, or religion, it’s illegal.
🚨 Retaliation – If you were fired after reporting misconduct, harassment, or safety violations, this is wrongful termination.
🚨 Violation of company policies – If your employer ignored severance agreements or laid off workers unfairly, you may have a case.
💡 What to do:
✔ Document everything – emails, termination letters, performance reviews
✔ Consult a labor attorney – Many offer free consultations
✔ File a claim with the EEOC if discrimination is involved (EEOC website)
6. Health Insurance & COBRA Coverage
Losing your job means losing health insurance, but you have options:
📌 COBRA (Consolidated Omnibus Budget Reconciliation Act)
✅ Allows you to keep your employer-sponsored health plan for up to 18 months
✅ You must pay full premiums (including your employer’s portion)
✅ Check if your employer must offer COBRA (companies with 20+ employees must)
📌 Affordable Care Act (ACA) Marketplace
✅ You may qualify for subsidized health insurance at HealthCare.gov
📌 Medicaid & CHIP
✅ Low-income individuals and families may qualify for free or low-cost coverage
💡 Tip: Compare COBRA vs. ACA plans—COBRA is convenient, but ACA plans may be cheaper!
7. Final Paycheck & Benefits Payout
After a layoff, you’re entitled to:
✔ Your final paycheck (state laws dictate timing)
✔ Payout of unused PTO (depends on company policy/state laws)
✔ 401(k) & Pension options (roll over to an IRA or another plan)
💡 Tip: If your employer delays your final paycheck, check your state’s labor laws—you may be entitled to penalties for late payment!
8. How to Protect Yourself Moving Forward
Now that you understand your rights, take steps to secure your financial and professional future:
✅ Review all layoff documents carefully before signing anything
✅ Apply for unemployment benefits ASAP
✅ Check COBRA & health insurance alternatives
✅ Negotiate severance if possible
✅ Seek legal advice if you suspect wrongful termination
✅ Start your job search immediately (update resume, LinkedIn, and network)
💡 Remember: You are not alone! Many resources are available to help you through this transition.
🚀 Need more help? Visit www.laidofffromwork.com for expert resources on navigating layoffs, finding new jobs, and protecting your financial future.
