A couple of weeks ago we wrote about emotionally recovering from being laid off. It’s a big blow and one that came unexpectedly to millions of Americans over the past few weeks. At the end of that blog, we said,
In moments like this, it’s important to remember that no one will hold getting laid off during this crisis against you. But the action you take to prepare yourself for what’s next (even if that action is getting in a good place mentally) will only help set you up for success.
Today, we’re here to talk about the actions you can take to prepare yourself for what’s next.
First things first, it’s essential to have a clear understanding of what getting laid off looks like and what you should expect to receive from your company.
Your last paycheck
Your last paycheck at a company will often be a physical paycheck, so make sure you know where yours is going and that you receive it. Take a careful look at the deductions on your paycheck. Pre-tax deductible items like health benefits will be more on your final paycheck if it’s delivered before the end of the month.
Employers are not allowed to withhold paychecks, even if you’re still holding onto company property; but, if you are, you may see deductions for unreturned items in your paycheck.
While employers are not legally required to provide severance pay, this may be something your company decides to provide. So make sure you are aware of their severance pay policy. The length of severance pay can vary based on how long you worked at your company.
Severance can also be negotiable, especially based on your position at the company (more senior roles will likely have pre-negotiated severance terms), negotiations don’t have to be completely based on a paycheck number. You can also ask for Healthcare insurance continuation, right to your own creative work, or better equity terms.
Handling equity after being laid off
If you were laid off from a startup, one of the reasons you likely signed on was The chance to receive equity and share in the company’s success. So what happens to the equity after you’ve been let go?
First, it’s important to understand what kind of equity you have, is it restricted stock or stock options? Restricted shares and stock options are both forms of equity compensation, but each comes with some conditions.
“Restricted shares are awarded outright, and their owner has the same rights and privileges as any shareholder. They may receive dividends and vote at the annual meeting, for example. However, the shares may be vested, and the company may reserve the right to buy back unvested shares if the employee leaves the company.
Stock options are the right to buy a certain number of shares at a certain price in the future. The employee will get a windfall if and when the company’s stock price exceeds that price. Stock options, like restricted shares, are often vested.” [Investopedia]
If you are given stock options, make sure you know the timeframe in which they’re available as it will be limited, typically about 90 days.
Applying for unemployment benefits
Whether or not you feel you need unemployment benefits, it is a good idea to apply. You also need proof of your application in order to receive state healthcare benefits. This website is where you can apply for unemployment benefits. You’ll likely be able to see a payment from unemployment benefits within two weeks from applying, and every two weeks after that.
What may be important to note is that if you are offered a job, or invited back to a job (if you were furloughed), you are no longer eligible to receive unemployment benefits. “Further, furloughed workers who receive back pay for their time away from work will typically have to pay back any unemployment benefits they collected.” [The Street]
What happens to your benefits?
While most company “perks” will often end on your last day, other benefits can be extended. Any savings you have in a 401k account can be rolled over into a new account with a new employer or kept the same account, although there may be fees for this.
COBRA is a health insurance program that allows eligible employees and their dependents the continued benefits of health insurance coverage when an employee loses their job or experiences a reduction of work hours. [Investopedia] It allows you to stay on your employer’s health insurance plan, although you will have to pay $500 or upwards of $1,000 a month, particularly for families.
Looking for your next job after being laid off
Again, it’s important to know that no one will hold being laid off against you. Yesterday, we asked Scouted’s co-founder, Jax how candidates should approach their job search during COVID-19. This is her response:
“The first thing I always ask people is, ‘Do you know what’s important to you in a job? Have you laid out your top 5-10 factors and ranked them?’ You can’t get what you want without knowing what you want.
So, first, take the time to think through what is important to you in your next job – be it industry, company type, brand recognition, position, job responsibilities, manager, culture, compensation, location, etc. – take the time to also think through your risk tolerance and your desired future career path. Prioritize your list so you have a clear framework to guide your search.”
Besides this, it’s important to do your research and understand what industries and companies are actively hiring. While some companies are, of course, laying employees off, some companies have frozen hiring, some have drastically slowed hiring, and some have increased hiring due to the demand in their industry. Do your research on who’s hiring before spending the time filling out an online application. Our next point might be able to help with this.
This is a time where we’re all trying to figure out, “Ok – what just happened?” It’s a time where we’re taking a moment to reflect on what’s going on around the world, to hold it together mentally and emotionally. But it’s also a time for preparing for next steps.
COVID-19 has affected lives around the world. But we also know that this situation is normal. Those who have been laid off will find jobs again. And in the meantime, Coached by Scouted is a service that we’ve made available and, especially, affordable for those needing to navigate this new terrain, because we don’t want anyone to have to do it alone.
Our Scouts can help job seekers know where to look for jobs, help with resume optimization, interview prep, salary negotiations, and even beyond. If you’re interested in talking to a Scout, click here!
If you have any questions about how to handle being laid off, leave them in the comments below, and look for our weekly “Ask Jax” segment on Instagram where Scouted’s Co-founder, Jax Loeb answers your job-search questions!