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Preparing for Unemployment if You're Losing Your Job

Unemployment

Getting laid off is very stressful. As a result of the current economy, there are thousands of people across the country losing their jobs. In fact, most of us by now know someone who has been recently been laid off. If you think your employer may be preparing to lay people off, it’s important that you prepare ahead of time. If you just lost your job, there are other important steps that you need to take immediately. This section provides support on how to prepare for a lay off and what to do if you are laid off.

 

This information has been developed by Foster Care Alumni of America. FCAA’s mission is to connect the national community of adults who have lived in foster care, and to work with others to improve foster care practice and policy.  Please visit www.FosterCareAlumni.org to learn more and to join the FCAA community.

Questions to Ask Your Employer before Your Employment Ends

Ask the Boss

  • Will you be getting a severance package? Severance packages look differently across organizations. They can include pay at your current salary for a limited period of time or extended health insurance benefits. It’s also important to note that severance packages can affect the amount of unemployment benefits you receive. Unfortunately, employers aren’t obligated to give their employees a severance package.
  •  Will you be paid for unused leave including vacation, annual leave, etc.?There is generally a policy related to unused leave in your employee handbook. Make sure you review your company’s policy. You should also confirm how much unused leave you have accumulated.
  • When will your health benefits end? If you have a health insurance plan through your employer, you want to confirm when your benefits will end. Some employers will address this in the severance package. Typically, if your employment is terminated after the first day of the month you are eligible to receive health insurance benefits until the end of the month.
  • When can you expect to receive information about Consolidated Omnibus Budget Reconciliation Act (COBRA) health benefits? COBRA provides continuation of group health coverage that otherwise might be terminated. Employers or health plan administrators are supposed to provide you with a specific notice regarding your rights to COBRA continuation benefits. For more information about COBRA, check out The Department of Labor’s FAQs for Employees about COBRA Continuation Services.
  • Can they prepare a letter stating the reason for your termination? For your own personal records, request a letter stating that you have been laid off.
  • Can they prepare a recommendation letter? It’s always helpful to have a letter of recommendation for your files. This letter should address your duties and job performance. You also want to make sure you have the contact information (e.g., addresses, emails, phone numbers, job titles) of colleagues and supervisors that you would consider using as a reference.

Steps to Take if You Think You Might Get Laid Off

Many see the writing on the wall before they actually get laid off. For example, has your organization asked employees to take furloughs, decreased their hours, imposed hiring freezes or cut travel budgets? These are just some of the signs that an organization may be headed towards layoffs. If you think your position might be eliminated, you don’t have to get caught off guard. There are several steps you can take to be proactive, including:

Set aside an emergency fund. It’s a general rule that everyone should have three to six months aside to cover basic life expenses in case of emergency. If you don’t have money set aside—now is the time to start saving. You don’t want to lose your job and not have a safety net. Unfortunately, unemployment benefits are not nearly enough to cover all of your basic needs.

Live within your means. This is not the time to splurge! Don’t spend on anything that you don’t need. Make sure you prioritize and cut corners where you can.

Be careful with those credit cards. You want to make sure you don’t charge anything on your credit cards. Remember, this will be one extra payment that you will have to deal with if you lose your job. Do your best to put your credit cards away and only use them if absolutely necessary. If you already have debt on your credit cards, check the interest rates and see if you there are any balance transfer offers (e.g., 0% for six months, 2.99% for one year, etc.) on other credit cards that you can take advantage of. Typically, creditors charge a small transaction fee for balance transfers. Make sure you read the fine print and pay on time. One missed payment can reverse your account to an increased interest rate.

Talk to your loved ones. If you think there is a chance you might lose your job, it’s important to discuss your financial goals and priorities with your loved ones. You want to make sure you are on the same page, particularly if the loss of your job is going to impact others around you.

Update your resume. Needless to say that the idea of getting laid off can be emotionally stressful, however, it’s also an opportunity to reevaluate your professional interests and career path. Take the time to revise and update your resume. The sooner this is completed, the sooner you can begin to apply for new positions. Browse the Internet for sample resumes.

Save samples of your work. You will want to keep samples of you best work (e.g., writing samples) on a personal flash drive or email copies to your personal account. Samples of your work are incredibly helpful for when you pursue new job opportunities. However, employees who are let go oftentimes do not have access to their email accounts or files afterwards. Therefore, save anything you would like to keep for yourself immediately.

Be on the lookout for opportunities. Networking is going to be very important as you prepare to embark on a job search. Touch base with those close to you to see if they know of any opportunities or connections that you should explore. A completed resume will be essential in networking with others. You can also consider developing your professional network of trusted contacts online.

Check your employee handbook. Familiarize yourself with your organization’s personnel policies. The policies should address issues such unused leave and the layoff or termination process. You probably received a copy of the handbook at the beginning of your employment. It’s good to locate this document well in advance of a layoff. Remember, some people are asked to leave the office immediately and do not have time to gather much of their belongings before leaving the office.

Schedule any pending medical appointments. Your health is probably one of the last things on your mind if you’re preparing to lose your job. However, it’s important that you take a minute to address any health matters before your insurance runs out. Think about it—did you cancel your last dental appointment or not schedule your yearly physical? While you might be eligible for COBRA, it’s wise to use your current insurance while you still can. So plan ahead.

How to File for Unemployment Benefits

All of us probably know someone who has been laid off from their job. So, if you just lost your job, know that you are not alone. If you have been laid off from your job, you are likely eligible for unemployment benefits, also referred to as unemployment insurance. These benefits provide temporary financial assistance to unemployed workers. Unemployment benefits are paid for by employers and your tax dollars when you are working. You can only claim for unemployment if you were laid off by no fault of your own and meet the requirements of state law. Unemployment benefits are time limited and vary from state to state. If you leave your job on your own free will, you will not be eligible for any unemployment benefits. For more information, check out the Department of Labor’s overview of State Unemployment Insurance Benefits.

As soon as you have been notified of your lay off, you need to contact your State’s Unemployment Insurance Agency to find out your state’s specific process. There are many ways that you can file for unemployment—online, in person or by phone. You will likely have to gather lots of information, make numerous calls and verify required information. You may need to provide your past employer’s contact information along with your salary history.

Avoid Losing Your Unemployment Benefits

Unemployment benefits can help while you look for another job, but remember benefits are time limited. It’s important to follow the unemployment process carefully to avoid any disruptions with your weekly benefits. Your unemployment check will be reduced if:

  • You collect a pension, including Social Security. If your weekly pension amount is equal to or greater than your weekly benefit amount, you won't receive any unemployment benefits.  
  • You still receive severance pay from your employer. Your check will be reduced based on the amount of the severance pay.
  • You owe child support. Your check may be cut by 25 percent if you owe child support. That money will be used for your child support payments.
  • You get wages from another job. You can still get unemployment benefits if you have a part-time job, but the amount will be reduced based on your income.

You can lose your benefits if you don't do the following:

Register as directed with a job service. Your case worker will tell you when and where you need to register. 

Report each week, or as often as you're told to. These meetings are important because they help your case worker track your progress.

Actively look for a job and have proof that you're looking. Unemployment Benefits are temporary. You must look for a job so you can get off of unemployment as soon as possible.

Attend a training course, if you’re told to. Training courses will give you job training. This training will help you find a job faster.

 

If You're Unemployed, You May Qualify for Other Assistance

Depending on your economic situation, you may also be eligible for other benefits including Medicaid,Temporary Assistance to Needy Families (TANF) or food stamps, now known as the Supplemental Nutrition Assistance Program (SNAP). Additionally, depending on where you live and your specific circumstances you could be eligible for other programs. It’s important to explore all your options during these difficult times.

There are several tools available to help you determine what benefits you are eligible for based on your income. These include:

  • BenefitsCheckUp is a web-based service that can be used to determine if you may be eligible for a wide range of benefits including prescription assistance, Medicaid, Medicare, SNAP, housing and transportation benefits. This website is primarily for seniors however, this tool can be helpful in identifying a number of resources regardless of your age.
  • GovBenefits.gov is a Web-based questionnaire that can help you determine which benefits you might be eligible for. You can also target your search by categories. For example, find out how to apply forMedicaid in your state or what programs are available for food assistance where you live.
  • This Pre-Screening Tool can be used to determine if you may be eligible to receive Supplemental Nutrition Assistance Program (SNAP) benefits.