Job Loss Benefits

Posted by Sessions & Kimball |

Turn job loss defeat into victory!

As an employee rights attorney, I have counseled thousands of people who have lost their jobs. Their true experiences, slightly altered to protect confidentiality, provide valuable lessons.

Consider the common example of Jim, a 20?year aerospace engineer who suddenly received a pink slip because of a reduction in force. The loss of his job was absolutely devastating, especially when he had devoted most of his career to one employer. It caused depression, lack of self confidence and stress on his marriage and family life.

Studies have shown that the loss of a job is the third most traumatic event in a lifetime, after death of a loved one and divorce.

Yet despite what seems to be a losing situation, there are ten ways employees can win when they lose their jobs. The first five address money and the last five happiness or self improvement

1. Severance Money.

Mary, an eight year executive assistant, received $100,000 in severance pay. John doubled his $25,000 severance pay, even after he signed a release.

Employers are not required by law to offer severance packages to their employees. However, if a company establishes a severance package policy, it is obligated to honor its promise.

Although there is no standard policy on severance amounts, many employers give a certain amount of severance pay per year on the job, such as one or two weeks of severance pay for each year of service. The amount may depend on the strength of claims you have against the company, longevity of employment, damages to you of losing your job, other benefits of the package, past practices in the company, value to the company, signing of a non competition agreement, confidentiality or trade secret promise and your negotiating ability.

If a severance agreement contains a release of claims (including age), it must be in writing, you must be given 21 days to consider it and seven days to revoke after signing, and you must be advised to seek the advice of an attorney.

The timing of the severance payments in a lump sum or payments may affect other benefits, such as unemployment insurance, pension benefits, health insurance and taxes. If the package is structured correctly, much or all of the severance plan can be made non taxable. In the event the money is paid in installments, try to negotiate a fixed period of time rather than having it terminate when you find a new job.

Even though certain employers having more than 20 employees are subject to COBRA rules by which your health insurance must be continued at your expense for 18 months, you can negotiate it or other insurance benefits to be paid by the employer.

A common part of severance packages includes outplacement assistance with the formal help of a specialist, or access to typewriters, computers, phone or secretarial support of the company. In the alternative, the monetary cost of such assistance could be requested.

Whether or not you are offered a severance package, do not be afraid to negotiate. Research the practices of your company by talking to other workers who have lost their jobs. Evaluate the strength of possible claims you may have against the company. Just as with salary negotiations, approach the company’s severance package as its starting offer. Don’t let them coerce you to sign anything until you have had time to thoroughly review all documents with an attorney.

2. Unemployment Insurance Money.

“I was fired, so I don’t quality,” thought Fran. She filed for unemployment insurance benefits anyway and received more than $5,000 in the next six months. Aside from the monetary help, she also received free outplacement assistance until she found a new job.

Unemployment insurance benefits help those who are out of work through no fault of their own. Both employers and employees pay into a state fund to pay unemployment benefits. The states calculate the benefit differently. They range from a low in the state of Indiana of about $120 per week to a high in Washington, D.C., and Massachusetts of $335 to $445 per week based upon whether you have dependents. You can receive benefits up to 26 weeks or more if there is a current extension policy.

Eligibility requirements are fairly consistent. You must not have been terminated because of a deliberate violation of an important obligation owed to the employer. Thus, even if you are fired, like Fran, you still qualify if you did not violate the rules. You may have quit your job for a good cause, which is a serious and compelling problem you are unable to resolve after attempting to work it out with your employer. You must be able to work and be available for a position that reasonably corresponds with your education and training. Even though you are not required to take any job, you are expected to accept suitable work in accordance with your physical fitness, training, prior earnings and experience.

File with your local unemployment office promptly because the benefits are not back dated beyond the filing period. Anticipate that your employer may fight your claim for unemployment benefits to try to reduce its costs in the future. If your initial application for benefits has been declined due to opposition from your employer, file an appeal. The vast majority of all applicants receive unemployment insurance benefits.

3. Workers’ Compensation or Disability Insurance.

Susan saw the writing on the wall. Despite her efforts to work with her injured back, her name would probably be on the layoff list. She had nothing to lose by taking a work injury leave on her doctor’s advice. Over the coming year, she received thousands of dollars of benefits, and when she returned, layoffs were no longer being considered.

If you can’t work because of an injury, you may receive benefits through workers’ compensation insurance or state disability insurance.

Workers’ compensation pays your medical bills and part of your lost salary if you are injured at work. Even though the amount may be about the same as you might receive under unemployment compensation, there is no limit as to how long the payments may continue in the future.

In most states, the employer is responsible for notifying employees that workers’ compensation benefits are available for on the job injuries. It is illegal for employers to retaliate against employees who either file or express their desire to file for workers’ compensation benefits. After you are recovered and ready to go back to work, the employer must place you in the same or a similar position, if possible.

Disability insurance pays you benefits if you are injured outside of work. One type of disability benefit is that promised by an employer. Short term disability benefits will often pay an inured worker 50 percent to 100 percent of salary for a period of up to three to six months. Company sponsored long term benefits take over after the short term program expires. Under this plan, benefits are paid at a lower percentage of the employee’s previous salary, but may continue for several years in the future or even throughout a lifetime. Often, company sponsored disability programs will require that you first apply for state sponsored plans. Any amounts received will offset the obligation of the employer.

A few states also offer state administered disability insurance for employees. Usually, your claim can be pursued through the same state office that handles the unemployment compensation insurance. In the states that offer it, state disability insurance will typically only last for a maximum of one year.

4. Social Security Money.

“It’s my money, so why not take it?” That was the position of Mary, who decided to retire after being laid off at age 62. She will receive a consistent flow of hundreds of dollars per week for the rest of her life.

Social Security benefits are available to qualified applicants. The primary benefits offered by the Social Security Administration include retirement benefits, disability benefits and Supplemental Security Income.

Retirement benefits are given to workers upon turning 62, who have met basic work requirements, and have paid a minimum amount into the Social Security system. These benefits may be a good temporary option for the qualified worker, who can even return to work and apply for Social Security benefits again at a later date. These benefits will be offset by any additional earnings that you may be making from another job.

Disability benefits are given to employees who are disabled through injury or illness and are prevented from resuming work duties for at least one year. It may take six months to one year to qualify for these benefits. The employee must be incapable of resuming any job functions, not limited to those of the previous job. Even though these benefits represent only a fraction of your previous income, if you are disabled, you may receive these benefits on a long term to indefinite bases.

Supplemental Security Income is a very narrow program administered by the Social Security Administration for those with essentially no income and who do not qualify for other assistance programs. The benefits are generally a maximum of a few hundred dollars per week.

5. Wrongful Termination Money.

Pam was an employee time bomb. For many years, she endured dirty jokes of her co-workers, sexual comments by her boss, and less qualified men being promoted ahead of her. She put up with it, despite her complaints, because she needed the money. Now diplomacy with her boss no longer mattered. She was laid off. The time for justice had finally arrived. She recovered $100,000 without even filing a lawsuit.

You can hardly open a newspaper without finding several articles on employees suing their employers for discrimination, retaliation or breach of contract. This is not surprising, especially if, as some contend, the average jury verdict (nearly $1.5 million in California) is like a gold mine.

Even though wrongful termination cases receive the most publicity, even if you are legitimately laid off or fired, you still have a “case within a case” for any prior improper acts by the employer.

An employer can’t discriminate against you in hiring, firing, or promotions based on race, color, religion, sex, pregnancy, age, handicap, veteran status, national origin, cancer, ancestry or marital status.

Your employer can’t retaliate against you for blowing the whistle on them-either to the government or to management-because of illegal practices, unsafe conditions, discrimination in the workplace or failure to pay wages appropriately.

Even though the employer may consider you an “at will” employee and subject to termination at their whim, they may have to live up to their promises and show an appropriate reason for termination.

Additionally, the employer can’t commit other civil wrongs such as slander, fraud, assault and batter or invasion of privacy.

The strength of your claims against your employer will greatly affect the amount of money you can recover under this or the severance pay category.

6. Additional Education or Training.

Mike had been a machinist for a large employer for 20 years when he was laid off. Even though he was a supervisor, he was competent on only three of the seven machines used in his department. The employees who survived the layoff were trained in five or more of the machines and were more valuable to the company than Mike.

While looking for another job, Mike took the opportunity to take evening classes through a local community college and became proficient with additional machines. With his many years of experience and newly acquired skills, Mike was at the top of the rehire list when employees were called back to work. He ended up increasing his compensation and chances for further promotions in the future.

If knowledge is power, then education is one of the best investments of time and money. Many community colleges are essentially free. Night classes allow for part time employment or job search during the day. Further education can provide vocational re evaluation training or simply build your qualifications for future employment prospects.

7. Career Enhancement.

Was she depressed over being fired? Of course she was at first, but after a few months, Sally was able to find another job with a higher salary, better chance for promotion and association with nicer people.

This happens a lot more than you might think. Many people suffer through continued employment with an undesirable employer simply because they do not want the insecurity of trying to find another job. It is often good to be forced to do your homework as to your own qualifications and marketability. You may be pleasantly surprised.

8. Self-Evaluation and Improvement.

“I needed a kick in the pants,” Michael, a dedicated ex-salesman concluded. “It made me realize what was most important in life.” He then sacrificed higher pay for employment without sales trips away from his family. To him, it was well worth it.

A natural consequence of job loss is loss of self esteem. Psychologists state that those who lose their jobs go through prolonged periods of introspection and evaluation, which can lead to anger, humiliation, self-pity and depression.

At the same time, job loss provides an opportunity for self-evaluation to identify not only your weaknesses but also your strengths. By improving your strengths, you generate self confidence in dealing with prospective employers and self satisfaction and happiness with yourself.

Learning financial management skills is an added benefit to unemployment. Finally, you have the chance to learn how to budget.

Assessing values and relationships is a natural consequence of losing your job.

9. Job Search Satisfaction.

Jack’s layoff actually helped him avoid a divorce. It had profound beneficial consequences for the rest of his life. He still put on his tie every day to go to work. Jack’s work now, however, was his search for his job. During work hours, he camped out at the free outplacement office sponsored by the state. He helped teach others who had recently lost their jobs as required in that program. Jack’s job search was actually a pleasurable challenge and one that finally landed him a job a few months later.

A job search does not have to be a negative experience. Unfortunately, most job hunters spend five hours or less each week on their job hunt, while career counselors recommend spending at least 30 hours per week. The more ways used in finding a job, the greater the chance of finding one. The average job hunter uses less than two methods. Most job hunters interview with six employers per month. Career counselors recommend two interviews per day.

Those who approach the search as a job in itself have a much greater chance of gaining satisfaction and understanding about themselves through the process of interviews and interaction with others. Many develop lifelong relationships with peers they meet during the stressful transition period. Another unemployed worker, James, actually switched his career from sales to teaching after he discovered he enjoyed helping others learn job search skills.

Those unemployed workers who set attainable goals and outline steps to meet them within set time limits in an organized time management program have the highest chance of enjoying the process. As with most things in life, you receive back from your job search what you put into it.

10. Following Your Dreams.

Tom was happier than he had been for years when he lost his job and received a sizable severance agreement through negotiation. The day after he received his money, he moved his family to Oregon to pursue his dream of operating a small retail store. They now live and operate their business surrounded by a forest.

When Ashton lost his job, he traveled throughout the country with his family for six months. All his life, he had hoped to visit places he had previously only seen in books. When he returned, he was able to focus intently on the job search with renewed vigor and success.

The loss of a job provides you with an opportunity to pursue your dreams. It may be a new career or possibly going into business for yourself. What may have been an entertaining and enjoyable hobby might become a new business venture. It might be a time of new commitment to your family. Some have found great satisfaction in volunteering for a favorite civic organization or charitable group. It is a time to turn dreams into reality.

To win when you lose your job does not seem reasonable. But it’s true. Maybe turning lemons into lemonade was not bad advice after all.