How to handle a layoff
Losing a job can be devastating, but knowing what to do during your exit can make the situation much more manageable. Kathy Gromoll, a senior compensation analyst who teaches in the psychology program at the University of Phoenix Austin Campus, recommends taking these steps within the first week after receiving a pink slip:
Review your severance agreement.
Gromoll advises against signing any severance agreement immediately. Read it carefully and discuss it with your family and an attorney, if possible. “Be careful not to sign away your rights without negotiating additional compensation or a gain of some sort,” she warns.
Also review agreements you may have regarding noncompete or nonsolicitation clauses that could impact your job search. Gromoll suggests asking what company-related information you may take with you — such as vendor contact lists or completed project files for a portfolio — and ensuring that's addressed in the agreement.
Sort out the financials.
Know your final paycheck amount and whether it will be distributed as a lump sum or a continuation of pay. "The latter could be a better option if you want to continue active employee benefits and possibly qualify for loan application purposes," Gromoll notes. Also, be sure to ask how any outstanding expenses will be reimbursed. If you had a company phone, car or computer, for example, will it remain with your employer, or could you retain or buy it?
Understand the company’s policy on references.
How does your employer handle job references? Whom should potential employers contact? What information will the company share during your job search? These points are especially critical if your supervisor was also laid off. Gromoll recommends getting names, emails and phone numbers for colleagues and vendors who can be references.
File for unemployment.
Verify how your former employer will respond to your unemployment claim. Regardless of the answer you get, you’ll want to file for these benefits right away as there's often a waiting period before the first check arrives in your mailbox.
Check your benefits status.
"Find out if your company provides continuation of health care benefits under COBRA," Gromoll says. "If not, you may still be eligible to convert your health coverage to an individual plan without providing evidence of good health." She points out that you may be able to convert other group benefits too, such as life insurance and disability insurance — an important point if you have a pre-existing condition.
If your company has a retirement plan, check to see if you're vested, can begin collecting benefits, or can roll over funds or cash out.
Ask about counseling.
Does your employer have an employee-assistance program that offers counseling? If not, sometimes the company will provide counseling as part of your severance package. "Suppressing anger, hurt and shock will only make them worse over time," Gromoll says.
"You want to deal with these feelings so when you begin interviewing for new positions, you have a more positive, upbeat image."