Life is unpredictable, which can be a good thing. But unfortunately, that unpredictability has the potential to lead to unwanted surprises. Learning you’ve unexpectedly lost your job is disheartening, and it’s very often traumatic.
If you got laid off without warning, the stress of changing jobs, future job insecurity, and the job hunt might be overwhelming. It’s a lot to consider at once. Give yourself time to calm your mind before jumping into the next steps.
Also remember that as an employee, you have legal rights and often unemployment benefits. When you’re ready, tie up loose ends with your former employer and learn what you’re entitled to.
Understanding the layoff process, your employer’s obligations, and if applicable the legal implications of getting laid off will make for a smoother transition so you can move on to the next step in your career path.
What does it mean to be laid off?
Being laid off means that your employer is letting you go for reasons unrelated to your performance. It usually has little to do with your work and is more about the company’s needs.
Organizations typically lay off staff as a last resort when they can’t combat financial challenges or other circumstances beyond their control. Large layoffs result from a lack of new work or clients, decreases in revenue or profits, or a business reorganization.
In 2022, quits decreased and layoffs increased, according to the Bureau of Labor Statistics. And the trend includes all industries, though layoffs were particularly high for professional and business services.
Other circumstances that can cause a layoff include (but aren’t limited to):
A business merger that causes redundancies in staff
An unstable economy caused by a national recession, poor international economic projections, or a global health crisis like the COVID-19 pandemic
Changes in consumer trends that lower profits
Lost contracts that dry up production or cause a relocation or office closure
What’s the difference between being laid off and fired?
When a business decides to fire an employee, it’s typically because of their poor performance. An employee getting fired usually already knows it could happen, whether they were on an unsuccessful performance improvement plan or had been spoken to by their manager about their performance.
Getting laid off, on the other hand, is about the company rather than individual productivity or output. Common reasons to get fired include:
What to expect from a layoff
Layoffs can be chaotic. It’s not unheard of to lay off employees by removing them from the company server or sending out a mass email notice. But a good employer will announce a reduction in force privately and face-to-face, even if there’s little warning.
Keep in mind that the Worker Adjustment and Retraining Notification (WARN) Act dictates that layoffs of a certain size require advance notice, which you can read more about below.
If you’ve been laid off without notice, expect a process similar to the following:
A layoff meeting
You’ll likely sit down with leadership, your manager, or human resources to discuss the reason for the layoff and the conditions of your severance, if any. This is your opportunity to discuss how the company is prepared to help you adjust to the change, which could include:
Severance packages are private agreements between yourself and your employer. Under the Department of Labor’s Fair Labor Standards Act (FLSA), employers aren’t required to offer severance pay — a few weeks or months of your compensation — to a laid-off employee unless an employment contract, union contract, or company policy stipulates it.
According to a 2018 study, 88% of employers pay severance for a reduction in force or corporate restructuring, and the amount of that severance usually depends on seniority. The same study reported that 37% of employers pay for a flat number of weeks based on how many years you worked there.
That could be one week of pay for every year, two weeks of pay for every year, and so on. There are other ways of determining severance pay, but this is the most popular.
Here are some details to consider about your severance pay if you’ve been laid off from work:
The amount you’ll receive
Whether your employer will pay installments or a lump sum
Any compensation for unused paid time off
The exact date of your final paycheck
Take your time to consult with colleagues or an employment lawyer about the fairness of the offer, and carefully review the conditions. You can always negotiate if you believe you’ve been offered an unfair deal.
Sign a release
Once you’ve agreed to the terms of your severance, your employer might ask you to sign a release. This waives your right to sue and absolves the company of legal liability. There are no formal templates for a release, and they can be as broad or specific as the situation calls for, so read the details carefully before signing.
Layoffs with no warning and the federal WARN Act
The FLSA doesn’t require an employer to give prior notice of a layoff unless it falls under the WARN Act. Under this act, employers have to give 60 days advance notice to let employees prepare for unemployment in the following situations:
A factory closure
A mass layoff of at least 33% of full-time active employees with a layoff of a minimum of 50 full-time employees
A mass layoff of at least 500 or more full-time employees
What if my employer breaks the WARN Act?
If your layoff falls under the WARN Act but your employer doesn’t respect the required 60 days advance notice, you’re entitled to a monetary sum equal to back pay and benefits for 60 days.
State laws and local courts may have different interpretations of back pay, meaning enforcement of the WARN Act could be different if you live in California versus New York, for example.
If you’re eligible for back pay, check with state laws to understand whether you’re guaranteed 60 calendar days or 60 work days of pay.
Is the WARN Act valid if the company’s bankrupt?
Yes, in certain situations WARN applies, even if your employer declares bankruptcy. Your employer must give notice in the following situations:
Your employer is aware of the plant or office closing, or mass layoff, prior to filing for bankruptcy.
Your employee continues to run the organization even after declaring bankruptcy.
How do I file a claim if my employer isn’t following the WARN Act?
To file a legal claim, contact your state’s Department of Labor. Enforcement of the WARN Act begins at the municipal and state levels, so you’ll have to check the process in your area. When in doubt, consult an employment attorney or other professional, and don’t formally agree to anything you don’t fully understand.
What laws protect me from layoffs?
Many of the illegal reasons to fire someone also apply to layoffs. Federal and state employment laws prohibit employers from using discrimination or retaliation to decide who to lay off or fire.
These laws under the U.S. Equal Employment Opportunity Commission (EEOC) include the following:
When choosing who to lay off, employers have to make sure they don’t disproportionately dismiss, intentionally or not, a particular group of employees. For example, a disproportionate layoff of women, people of color, or people over 40 might be discriminatory under EEOC protections.
It might also be helpful to check labor laws in your state or area in case they differ from federal standards.
Should I sue my employer?
If you suspect that you were pushed out of your job because of discrimination or weren’t properly notified about a layoff, you may have reason to sue your employer. However, before consulting a lawyer, ask yourself some important questions:
Is it worth the stress? The time, emotional energy, and cost of litigation, plus an employment attorney’s fees, might not be worth the potential win. It’s an overwhelming process, and although it can be worth it, you should consider what you’re willing to invest.
Does my case fall under the WARN Act? Carefully review the notice requirements of your local and state laws and the number of days your employer has to give notice.
Was I discriminated against? Take notice of everyone who was affected by your company’s layoffs. If it seems disproportionate, there could be discrimination at play.
What are the state laws? Before contacting an employment attorney, you may want to contact your state’s Department of Labor to inquire about laws and regulations.
Fight for your rights to fair treatment
Losing your job is rough, especially if you got laid off without warning.
Once you’ve collected yourself from the initial surprise, research the regulations in your area and inquire about the laws involved. It’s essential to review everything in front of you, from your severance deal to potential extra benefits, to make sure you’re getting the deal you deserve.
Understanding the rights you deserve can help you put your best foot forward, no matter what you choose to do next in your career.