Losing your job can be a very stressful experience, but there are ways to make it a little easier for you and your family. From filing for unemployment to choosing health insurance, here’s what you need to know if you’ve been laid off.
In keeping with his campaign promise to restructure the federal government and cut monetary waste, President Donald Trump and his administration have slashed the federal workforce, laying off thousands of federal employees in the first month of his second term.
That number has only grown, with agencies like the Department of Education suffering massive cuts through Trump's second month — one of the president's many moves which have inspired legal pushback from several federal judges and Democratic-led states.
But according to financial experts, navigating a layoff doesn't have to be daunting. Here are some ways to get through a layoff — and how to prepare if you suspect a pink slip is coming your way.
What is the difference between being furloughed and laid off?
A furlough is an unpaid, temporary leave of absence or reduction of hours usually motivated by employee performance issues or company budget cuts. The length of a furlough depends on the company, though longer furloughs can lead to layoffs.
A layoff is a permanent, immediate termination of employment.
What are my options if I get laid off?
Employees who have recently been laid off should immediately file for unemployment with Department of Labor in the state in which they reside. Benefits may be delayed, so submitting an application as soon as possible is best.
Additionally, many financial and housing providers — like banks, landlords, lenders and utility companies — will work with recently-terminated employees to adjust payment plans for things like mortgages or loans.
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What am I entitled to when I am laid off?
On top of being entitled to a final paycheck, many employers offer severance packages to employees who have been laid off.
Qualified employees should also inquire about how to access their 401k benefits.
What is COBRA health insurance?
The Consolidated Omnibus Budget Reconciliation Act, enacted in 1985, allows employees who have recently become unemployed — either voluntarily or involuntarily — to remain on their employer's health insurance plan for up to 18 months. COBRA also extends to individuals who are undergoing a reduction in hours worked, transition between jobs, death and divorce.
However, COBRA can be expensive. Individuals who qualify may be required to pay the entire premium for coverage up to 102% of the cost of the plan. Private insurance or government plans may be more financially feasible.
How to prepare to be laid off
If you're concerned about being laid off soon, the best way to prepare is to get your finances in order, according to CNBC.
Experts recommend creating a budget and sticking to it, cutting out unnecessary expenses like streaming subscriptions and gym memberships and building up an emergency fund — ideally enough to cover three to six months of living expenses.
Updating professional resources — like portfolios, resumes and LinkedIn accounts — and reconnecting with professional contacts may also increase the likelihood of being hired quickly after a layoff.
