Do Employees Have to Sign Anything When They're Laid Off?

No one likes to receive a pink slip.
i Comstock Images/Comstock/Getty Images

When an employee is laid off, she may become confused and stressed out, not really knowing what her rights are and not trusting her employer to act in her best interest. An employee is not required to sign anything when she’s laid off. If she’s asked to sign a non-compete agreement or a waiver of her rights to sue, she should decline until she’s had the chance to have an attorney or other knowledgeable third-party review the document. However, she should ask her employer a few questions before exiting the building for a final time.

The Final Paycheck

Employers are legally required to pay exiting workers all earned wages within a certain time frame depending on state laws. This includes unpaid wages, unused vacation time and any other expenses owed. Employees should ask the company exactly when they'll be receiving the final paycheck and whom to contact if it doesn’t arrive by a certain day. Withholding wages is illegal and the company could be fined if the employee is not paid promptly.

Continuing Health Insurance

One of the biggest concerns many employees have is losing health care coverage. If she's married, the employee is typically eligible for her spouse's plan. Although her lay off may not occur during open enrollment, when eligible workers enroll in a health plan for the next year, she should still be qualified, as losing a job is usually classified as an exception to the policy. If the company has at least 20 employees who will continue to receive health benefits, she’s also eligible to keep her own plan for up to 18 months under the Consolidated Omnibus Budget Reconciliation Act, or COBRA. Specific requirements vary from state-to-state, so she should check her eligibility with human resources before leaving.

Severance Pay

Although a company is not required to provide severance pay to an employee, many do so as somewhat a of a peace offering, to thank her for her good service. If her company has a history of paying severance to all laid off employees, she may be legally entitled to a severance package. Having a past practice of paying severance to all employees can be seen by courts as a contract, giving laid off workers the right to a severance package. Severance pay can come in various forms and is often tiered according to the number of years spent working for the company.

Unemployment Insurance

A worker who has been laid off should contact her state unemployment insurance agency immediately to file for benefits. To qualify for unemployment pay, she must meet her state requirements for wages earned or time worked during a certain period of time. Her unemployed status must be determined as no fault of her own, meaning she was not fired or did not voluntarily quit her job. Rules and regulations vary according to each state, but it’s likely that she won’t be able to collect unemployment checks for longer than a 26-week period.

the nest