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Employee Law: What Are Your Layoff Rights?

written by: Amy Carson•edited by: Michele McDonough•updated: 7/24/2010

When you get laid off from your job, what are your employee rights? Layoff is a stressful time, but there are several things you should know about what the law says you deserve. This article explains those rights.

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    Know Your Layoff Rights

    Know Your Employee Layoff Rights When you get laid off, the cards may seem to all be in your (former) employer's hand. However, you are entitled to several employee rights. Layoff may result in you receiving unemployment benefits, earning a chance to opt into COBRA, transferring retirement accounts, and more.

    Image Credit: morgueFile.com/puravida

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    Show Me the Money

    Monetarily, there are several things your employer must do when laying you off. For instance, if you have earned vacation time, the law requires your employer to pay you accrued, unused vacation time owed to you. In rare cases, there may be a clause in your employment agreement forfeiting this benefit, but employers are required to notify you of that in writing, so if that's the case it shouldn't come as a surprise.

    How about your final check? If you're waiting long for your final paycheck to arrive, check your state's laws. In most states, employers are required to get the employee's last paycheck just like normal, on the next payday.

    What about retirement funds? You should receive paperwork regarding your 401(k) or pension plan at the time of layoff. 401(k)s are simple to deal with: they are easily rolled over into an IRA wherever you want. Pensions are a little more complicated. Your company may decide to pay you your pension in one lump sum, or you may still receive it when you retire.

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    What About Health Insurance?

    COBRA is is an acronym for a federal law that requires being offered continuation of health insurance under your employer-provided plan after being laid off from the company. COBRA applies to companies of 20 or more employees. You have the right to continue your health insurance, except now you'll be paying the entire premium out of your own pocket. However, COBRA health insurance is often cheaper than individual plans, and is a godsend for people who can't qualify for health insurance on their own.

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    Mass Layoffs

    If your company is larger than 100 employees and laid off at least 50 of them, they are required by federal law to give 60 days notice prior to the layoff. This is a provision of the Worker Adjustment and Retraining Notification Act (WARN).

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    Collect Your Unemployment

    If you are laid off, you most likely qualify for unemployment benefits. Most states have streamlined their unemployment office system over the past years, and allow signups and check-ins to be done online or over the phone. Unemployment will not pay as much as your job did (it's calculated using a somewhat complex formula) but it will help you get by while you job hunt.

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    If your job is in jeopardy, it pays to know your employee rights. Layoff is a procedure that has several state and federal laws governing it in order to protect you. Exercising those rights and making sure to obtain your benefits like unemployment compensation and COBRA health insurance can ease the worry of looking for another job.