Job Loss and Finances

Job Loss and its Resulting Money Matters

Job loss and the Resulting income loss leads to concern surrounding the Job Loss and Money Matters resulting.  The Job Loss and Money Matters that follow, under any situation is not only stressful and emotional but can cause financial repercussions for you and your family. Therefore, it is important to have a general understanding of FOUR important matters that can arise immediately upon the loss of a job.

1. Unemployment Compensation

You can always apply for unemployment benefits. The question is whether your employer challenges your application and if your reason for termination makes you eligible to collect.

If you are laid off, your job is outsourced, or you leave your employer involuntarily for any reason other than a violation of policy or law, it is unlikely you will be denied unemployment benefits, and unlikely your employer will challenge your claim.

If you voluntarily quit or you are fired for violation of policy or law, you may not be able to collect benefits. Collecting unemployment benefits may be a challenge if:

a. You are fired for insubordination.

b. You are fired for sexual harassment, assault, discrimination, or the threat of violence.

c. You are under the influence of alcohol or drugs while at work.

d. You steal from your employer.

e. You are fired for reasons that would be considered a violation of company policy or the law.

However, if your employer does not challenge your claim, you may still be able to collect unemployment benefits.

The initial application for unemployment benefits is something you can do on your own. However, if your employer challenges your claim, and you believe you should be entitled to unemployment benefits, you should consult an attorney. An attorney will discuss the facts around your termination and can respond to the employer’s challenge and potentially represent you at any hearings to determine your eligibility.

2. Paid Time Off

Paid Time Off refers to sick, personal, vacation, or comp time you have either accrued or is unused at the time of your separation from employment. In some cases, you may be entitled to be paid out for this accrued time upon termination. The answer to this will depend on your employer’s policies and practices, employment contracts, and/or collective bargaining agreements. Depending on company policies, and state and local laws, entitlement to unused time off can vary. If you are unclear as to whether you are entitled to this pay, you should review your employer’s handbook or policies or speak to your employer’s HR Department. If you think your employer is not following its own policies or is not following the law with regards to paid time off payout, you should contact an attorney.

3. Severance Agreements/Payments and Releases

Severance Payments and Release of Claims Agreements are a tool sometimes used by employers when laying off or terminating employees. Some companies offer severance to ease an employee’s transition into unemployment, and requiring a release agreement is just standard practice. In some cases, the employer may have concerns you pose a threat of litigation (protected class, sexual harassment claim, retaliation for disclosing an issue or being injured at work, etc.). To avoid the risk, exposure, and embarrassment of lawsuits, employers offer a severance package in exchange for your signature on a release of claims. The release of claims prevents you from filing a future lawsuit against the employer for any reason, and in exchange, they offer you compensation and/or benefits.

These agreements may be complicated, and confusing. Many employers are fair and generous with the compensation and/or benefits they offer, but there are employers who may try to take advantage of you or give you less than they should. Therefore, if offered a severance agreement/release of claims, you should have an attorney review and fully explain the document to you. The agreement is not legally binding until you sign it, and you may be able to negotiate for better terms through your attorney.

Severance payments are rarely windfalls of cash, but a skilled attorney may be able to negotiate additional weeks or months pay, additional benefits coverage time, or other benefits that will help ease the transition to unemployment like outplacement services, continued use of company computer systems, positive references, etc.

4. Consolidated Omnibus Budget Reconciliation Act (COBRA)

COBRA is a federal law that states that upon experiencing a Job Loss for any reason if you participated in your employer’s medical benefits, you must receive documentation explaining your rights to have that coverage continued under COBRA.

Pursuant to COBRA, upon termination from employment, you must be given the opportunity to continue your medical benefits without interruption for a period of 18 months at the same monthly cost billed to your employer, plus nominal administration fees. The total is usually around 102% of the premium cost.

While this is a noble law to prevent an inability to obtain necessary medications and treatment, the monthly payment is 100% your responsibility; the employer is under no obligation to continue any contributions. Therefore, if you lose your job and income, it can be difficult to afford monthly health insurance payments at 100-102% of the premium.

Depending on the reason and circumstances surrounding your separation from employment, payment of this monthly premium by your employer may be something worth negotiating for.

If you find yourself in the unfortunate situation of a Job Loss and Money Matters that follow, You must seek out advice from a trusted lawyer like me.

Thank you for reading!

– Paul