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Being Laid Off? Know Your Rights As An Employee

By Andrew Deen, Contributor

During the recent financial crisis, many companies ran into difficult times. Businesses struggled to stay afloat and employees were laid off. In the post-recession period, many companies are downsizing when their business does not meet set expectations. Today, employees are also familiar with the idea of pink slips, and they know that their individual performance and company’s financial health must be right to prevent any shocks.

Being Laid Off? Know Your Rights

While layoffs have become quite common in all industries today, many employees do not know that the law safeguards their interests and welfare. Here are some laws and policies that every employee should be aware of when he/she is asked to leave:

Final Pay

Final pay laws differ from one state to another. The general norm is to issue the final paycheck as soon as the employment ends. The final pay includes the wages an employer owes to its employees on the last day of their work. In addition, it covers overtime, bonuses, expense reimbursements, commissions, and vacation pay, if applicable. The law does not cover sick leaves in the final pay. Some employer, however, pay it to prevent the misuse of sick leaves.

Final pay may not include severance pay for the layoff. Further, employers are not required to issue severance pay by law. It depends on the employment contract or terms of a separation agreement.

Severance Pay

Severance release refers to the money an employee receives along with salary and other payments owed by the employer. A severance package is generally combined with other benefits like health insurance under COBRA. It is not mandatory for the employer to provide severance pay for any layoff unless a collective bargaining agreement is signed and put in place.

Severance packages are usually based on the duration of service and the employee’s current reimbursement. To receive the severance pay, the employee should sign a severance or separation agreement. The agreement defines the terms of layoff as well as a release clause.

Health Insurance

After being laid off, you may still be able to purchase COBRA extended health insurance benefits. If you are being covered by a group health insurance plan, then your employee layoff rights can make you eligible for extended health insurance benefits. COBRA is a Federal Act which makes it compulsory for employers with more than 20 employees to provide extended health insurance benefits in certain situations. Further, the Act qualifies layoff as a qualifying situation.

Discrimination Laws

It is very important to pay attention to what your employer tells you when he informs you about your layoff. For instance, if you are told that you are too old for the job, it can be deemed as discrimination. However, there are various aspects to it. A highly paid senior worker can be fired as the employer will be able to cut costs and hire two people for the same salary.

Federal Laws prohibit discrimination during layoffs. According to Title VII of the Civil Rights Act, 1964, employers cannot make employment decisions based on religion, race, national origin, sex, or pregnancy. Title I and Title V of the Americans with Disability Act, 1990 states that people with disabilities cannot be discriminated upon.

If you feel you have been a victim of discrimination, get in touch with a lawyer or contact the Equal Opportunity Employment Commission (EOEC). The EOEC will listen to your plea, question your employer, take note of the situation and arrive at an informed decision.

By staying informed about your rights, you can ensure you receive all the benefits you are entitled to. If you don’t feel very confident, contact an attorney and get necessary information about your rights.

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