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Losing a Job

A job loss can be a difficult experience and cause significant challenges, but it can also raise a number of legal issues and questions regarding an employee's rights. If you have resigned, been fired, or are being subjected to a layoff, this section can provide tips on severance pay, non-competition agreements, wrongful termination claims, and much more. Take a look at the unemployment benefits section to learn about how unemployment insurance works. These benefits can be an important source of funds for your family while you search for a new position. While losing a job is rarely a pleasant experience, knowing your rights and options can help make the transition much smoother.

Employee Rights Following a Job Loss

Most employment relationships are "at will," meaning employers are free to terminate employees at any time and for any reason -- as long as it's not illegal (such as discrimination) or in violation of a contract. But -- assuming you either quit your job, were legally laid off, or legally terminated -- you still have a few rights as you depart. These include:

  • The right to receive a final paycheck
  • The option to continue employer-sponsored health care plan (through COBRA)
  • Eligibility for severance pay or accrued vacation pay (if applicable)
  • Eligibility for unemployment insurance benefits

Wrongful Termination

Even in states with "at-will" employment laws, there are certain instances where it is illegal to terminate an employee. When someone is fired for unlawful reasons, the terminated employee may file a claim with the Equal Employment Opportunity Commission (EEOC). If the EEOC finds merit in the claim after investigating, then the claimant may file a civil lawsuit. Damages may include reinstatement and monetary awards.

Most cases of unlawful termination involve discrimination on the basis of one or more protected characteristics. Federal law prohibits termination on the basis of race, color, gender, pregnancy, age, disability, religion, or national origin. Some states -- including California -- extend these protections to LGBT individuals or other marginalized segments of the population.

Employees also may file claims if actions or policies had the effect of discriminating against a protected class, leading to termination, even if it didn't appear to be direct or even intentional. This is referred to as "disparate impact" discrimation and often leads to class action suits.

Unemployment Benefits

Workers who lose their job may apply for monetary benefits through their state's unemployment insurance (UI) program until they become employed again. Some applicants may also receive extended benefits while attending school to retrain for a new occupation. But in order to be eligible for these benefits, the employee has to have lost her job through no fault of her own.

While most employees who quit their job or are terminated are not eligible for UI benefits, those who were wrongfully terminated or quit for a valid reason that was caused by the employer can. In the latter scenario, the standard used is whether a reasonable person in a similar employment situation also would have left.

UI benefits typically are payable for up to 26 weeks, although the federal government (which provides partial funding to state UI programs) will often extend this during times of economic hardship. If you are denied benefits and believe this decision was reached in error, you may request an UI hearing.

Click on a link below for more information about the legal and practical implications of losing a job.