Benefits After a Layoff
If you've recently lost your job in a layoff, restructuring, or downsizing, you are likely concerned about money. Depending on your situation, you might be entitled to severance, unemployment benefits, and continuing health insurance, in addition to the wages you have already earned.
You are entitled to be paid for any work you have already done. State law determines when departing employees must receive their final paychecks (and what that check must include). Some states require employers to pay workers who have been fired or laid off right away; other states allow employers to give final paychecks on the usual payroll schedule. And, some states require employers to include any unused, accrued vacation time in the final paychecks. (See Final Paychecks for more information, as well as tips on other types of compensation you may be entitled to, such as reimbursements or commissions.)
You may have a right to a severance package, depending on your state's law and your employer's policies. A few states require employers to pay employees a small amount of severance when they lay off a large number of employees or close a facility. (Contact your state labor department to find out if your state is among them.)
Even if you aren't protected by this type of state layoff law, you may still be entitled to severance if your employer has promised it to you in a written or oral contract, in an employee handbook or other policy, or by following a practice of paying severance to all employees who are laid off. (See Severance Pay for more information.)
State Unemployment Insurance Benefits
Every state has an unemployment insurance program, run jointly with the federal government. Unemployment insurance provides some wage replacement to those who are temporarily out of work, through no fault of their own.
Each state sets its own eligibility rules for unemployment benefits. Generally speaking, however, you will be eligible for unemployment if you are laid off, fired for something other than misconduct (such as not being a good fit or lacking the skills to do the job properly), or quit for good cause (such as to relocate with a spouse in the military or to escape a domestic violence situation). Many states also require employees to have earned at least a minimum amount in wages from their last job, and/or worked for their prior employers for a minimum amount of time.
The amount and duration of benefits vary widely from state to state, but are typically a percentage of your average weekly earnings. However, most states also place a cap on how much you can receive each week; the maximum amounts may be updated each year. For more information, see our Unemployment page.
Continuing Your Health Insurance
If you are covered by your employer's group health insurance plan, you may be able to continue your benefits after you lose your job. The Consolidated Omnibus Budget Reconciliation Act (COBRA), a federal law, gives employees and their dependents the right to continue their health insurance coverage after an event that would otherwise terminate that coverage, such as a layoff, cut in hours, or divorce.
Employees must pay the full cost of continuing their health insurance, including any portion of the premium their employers paid while they were employed. For more information, see Continuing Health Insurance Benefits Through COBRA.