Making the Most of a Layoff

July 15, 2008

I was recently contacted by a reporter and asked to describe steps employees who are laid off from employment may take to maximize what they take away. As I prepared my response it occurred to me that some of the readers of this blog may find this information helpful. With the unemployment rate growing, there is a lot of advice available on the internet for those who find themselves in this unfortunate circumstance. has A Guide to Layoff Survival that provides some practical advice on dealing with emotions, managing finances and finding another job. I have focused on maximizing your benefits in a layoff situation. Following are some of my suggestions:

·         Explore whether benefits or other parts of a severance package are negotiable. Consider whether you can offer your employer an executed covenant not to compete or non-solicitation agreement. If you have already signed these documents, this is not an option, but if not, your employer may be willing to pay you for not competing or not soliciting either its customers or employees for a specific period of time. 

·         If you have not been offered a severance package, or if it is minimal, evaluate whether you have something to offer your employer in exchange for severance payments or other consideration. Can you offer to waive claims relating to your employment or termination that may have arisen out of the Employment Retirement Income Security Act, or due to discrimination on the basis of age, disability, sex, race, religion or national origin?   (Workers Compensation and minimum wage-overtime claims cannot be waived.)

·         Find out about Unemployment Compensation – the amount of benefits and the amount of time you can expect to receive them. Are there eligibility questions either because of your lack of earnings record, or because you were terminated for willful misconduct, or you voluntarily quit? 

·         Could you continue to provide services to your employer as either a consultant or on a part-time basis? Assuming the relationship is good and the termination is simply economic, these could be alternatives that would be acceptable to you and your employer. In Pennsylvania, you may earn up to 40% of your weekly benefit rate (partial benefit credit) before any deduction is taken from your unemployment compensation weekly benefit. 

Of course, it makes sense to consult with an attorney to explore these options and evaluate your best course of action. Although generally applying for Unemployment Compensation benefits is the first thing you should do, if there is any question about your eligibility status, or if the facts of whether there was a firing or a quit will be disputed, it makes sense to consult an attorney before making an application for benefits.