It is the time of year when companies are most likely to cut jobs and eliminate staff. And, if January 2025 is anything like the last two years, job loss for many is on the horizon. While no one wants to imagine their employment soon ending, not being prepared is even worse.
January 2024 was one of the most extensive months for layoffs in almost 15 years. Companies cited restructuring, closing, market conditions and cost-cutting as the primary reasons for dramatic staffing changes. How many of the 82,307 people left jobless in one month hired an attorney to review the paperwork their respective companies asked them to sign?
Employers spend months deciding which employees they will release, yet employees are asked to sign on the dotted line with a moment’s notice. Be prepared if HR delivers bad news. Your preparedness can save time and money.
Here’s what to know if you lose your job.
Don’t Immediately Sign a Termination Agreement
The shock of losing a job can impact one’s ability to think quickly on their feet–especially when completely unexpected. So, if there’s one thing to remember about this article, let it be this: it is not mandatory to immediately sign anything HR puts in front of you. It is within your rights to ask for time to review the documentation or consult an attorney before signing anything.
Employment attorney Peter Romer-Friedman wants every employee to understand that the company will ask you to sign a release of your claims immediately after notification. Their goal is to move you out with minimal expense, and that’s what they’ll offer. However, just because they tell you to sign on the dotted line doesn’t mean you should.
“Employees can ask for an extension of time before signing a severance agreement,” said Romer-Friedman. “That gives them time to seek legal counsel. In my experience, most employers will grant a reasonable extension of time for an employee to consider a severance agreement and they won’t pressure you to sign it in one or two weeks.”
Romer-Friedman says employers typically provide 21 days because that is the time employees age 40 and older have under the Age Discrimination in Employment Act. But it’s much more reasonable to consider six to eight weeks.
“If an employer says you have 21 days from today or seven days from today, workers should feel empowered to ask for more time,” Romer-Friedman added. “Most employers would much rather a worker take more time and come back to sign a release rather than walk away and then come back six months later with a lawsuit.”
Here are four additional actions to avoid if you find yourself unexpectedly terminated.
With Job Cuts, Understand Your Rights
Consult with a legal professional to understand your rights and determine if you have a legal claim. That would certainly add value to the severance negotiation. Or, you may decide to go to court and sue over potential discrimination–especially if it’s age or other types of discrimination common in the workplace.
Older workers find layoffs and employment terminations especially tragic, given the difficulties in securing re-employment after job loss. Many of these workers end up as long-term unemployed–those who give up looking for work after months and years of rejection. In November 2023, more than three million Americans were considered long-term unemployed–35% were 55 and older.
“I’ve represented workers who were employed by a company for 25 or 30 years, and they’re laid off with half-a-week or maybe one week of severance per year of service. It’s really a slap in the face and it is disproportionately older people who face that sad verdict on their career. It can affect people emotionally, socially and physically,” said Romer-Friedman.
Learn Who Else Lost A Job
“To understand your rights and leverage your position, it’s important to find out who else has been terminated,” said Romer-Friedman. “Employers are often required to provide information in a larger layoff, including the ages of people considered and terminated. If they don’t provide it, ask for it. That information can be really valuable for understanding whether an employee was unfairly targeted.”
Talk to other employees to learn who lost their jobs. Encourage other colleagues to seek legal counsel or come together as a group to discuss the situation with a lawyer. There is often strength in numbers.
When you’ve already been terminated, there is little risk in talking to colleagues to gather more facts. An employer is not likely to withdraw a proposed severance because a person has spoken to other workers.
“In my experience, employers offer severance not because they’re generous or feel bad about firing people or laying them off. Employers want legal releases of the claims that workers could assert if they walk away and don’t sign a severance agreement,” said Romer-Friedman.
In other words, employers are getting value by giving people severance benefits, and that value is that they avoid potential lawsuits and possible liability in the future. This gives workers more power than they realize.
“By acquiring information from other people, you can better arm yourself to understand the context and possibly provide leverage for negotiation,” said Romer-Friedman. “You can’t test whether the employer will pay you more unless you ask. So people should ask.”
Additional Considerations for the Newly Unemployed
Outside the severance package, there are other monetary considerations, such as unemployment benefits. Generally speaking, if you haven’t been fired for serious misconduct, you may be eligible for unemployment insurance, which can replace some of your income.
You have 60 days after a layoff to determine what you will do with your health care, whether to invoke your Cobra rights and stay on your healthcare plan or go for another one. Moreover, you may have a right under the Affordable Care Act to get a subsidy for your health care.
“The most important thing is to protect economic security, which is a combination of healthcare and unemployment benefits and the amount of separation pay negotiated with the employer,” said Romer-Friedman.
Some employers may offer employee counseling to help with the transition, which is an excellent way to help care for mental health and keep the mind and body strong during an incredibly stressful period.
“Try to do the things that can help fill the void of job loss, such as exercising, reconnecting and spending time with friends and networking,” offered Romer-Friedman. “This can help the newly unemployed pivot take care of themselves.”
A Recommendation for Employers
Transparency goes a long way. For employers who know job cuts are coming, the best thing to do is inform the workforce that layoffs will happen.
“Giving employees a warning is the most humane thing an employer can do–even if they don’t know who will be laid off,” said Romer-Friedman.
While it can be nerve-wracking for people to be in a state of not knowing, it is helpful to have time to prepare just in case.
“It’s a really sad thing when people feel like they’ve been loyal employees and get an email at 6:00 in the morning saying, ‘You’ve been let go. Don’t show up to work’,” said Romer-Friedman. “When that community is ripped out from under an employee without warning, that’s a hard thing to take and can lead to some pretty disastrous outcomes.”
“Job loss has real ramifications. People have responsibilities to their children, to their parents, to their cats and dogs. It’s incredibly traumatic, so the more advanced notice given and the more empathy that can be shown, the better,” added Romer-Friedman. “Even though employers are not required by most Federal or State laws in the United States, I think they should consider giving serious amounts of severance pay that realistically allows someone to transition to that next job–three or four months severance should be the minimum.”
Job cuts are stressful for employers and employees. Taking the right steps to safeguard everyone’s interest is key. Many employment attorneys offer a free consultation or a flat fee to review the details of a termination. Take your time to review, reflect and do what is right for you.