Coping with unemployment means breaking away from the past and facing your future. It means dealing with the emotional, financial, and professional challenges unemployment can bring. Although this process can be painful, facing unemployment with a plan will help make coping with it easier.
Find out what unemployment compensation you may receive
If you are being terminated for any reason, find out if you will receive severance pay and what unemployment benefits you may receive. You’re likely to receive severance pay if you are laid off, but severance pay is usually based on the number of years you’ve been with the company. If you are laid off or fired, you may be eligible for unemployment compensation from your state. Your employer can give you the details. You should also find out when you will receive your final paycheck and if you are eligible for compensation for vacation or sick days you accumulated but never took.
When Alice was laid off from her job as executive housekeeper, her employer gave her a final paycheck consisting of her last two weeks of salary and ten days’ worth of pay for the vacation time she had accumulated but never took. She also received severance pay equal to one month’s salary. In addition, her employer gave her the address and phone number of the nearest unemployment office, as well as information on how to apply for unemployment benefits in her state.
Find out about continuing your medical benefits through COBRA
If you work for a company with more than 20 employees, your employer must notify both you and your spouse (if any) via first class mail that you have the right to continue your group health insurance coverage after your employment has been terminated (unless it ended because of gross misconduct). Under COBRA, you can continue your benefits up to 18 months, and your spouse and dependent children may be covered up to 36 months. However, you’ll probably have to pay the full premium cost plus a small administrative fee–your employer won’t contribute anything. If you work for a company that has fewer than 20 employees, you’ll have to check your state’s laws to see if you can continue coverage. Some states have passed legislation that gives employees of small employers the right to continue their health care coverage for a certain period of time.
Determine how you will handle your retirement account or pension plan funds
If you will receive a lump-sum pension plan or savings plan distribution, decide where you want that money to go. It’s easiest if you authorize your employer to transfer funds directly from your retirement plan to another retirement plan you have set up elsewhere. Although you may be tempted to withdraw money from your retirement account to provide much-needed income, do so only if this is your only option.
Find out whether your employer-sponsored group disability or life insurance policy is convertible or portable
When you lose your job, you may also lose your disability or life insurance coverage. Although disability insurance is rarely portable or convertible (you can’t take it with you or convert it to an individual policy), your group life insurance policy may be.
Ask how the company handles inquiries about your employment
Afraid of being sued by vengeful ex-employees, many companies today will give only limited information about your employment. A few companies may be willing to give some information about the quality of your work, but, in general, companies may answer only factual questions such as your dates of employment. If you were fired, you may be happy if your company has a strict employment inquiry policy. However, if you quit or were laid off, you may wish that your employer would give out more positive information as well.
Line up references
If possible, you should line up one or more people who are willing to give you a good professional reference. Those you choose should be personally familiar with your work and hold positions in the company higher than your own. However, before you list any former supervisors as references, check with them; some companies forbid department managers or supervisors to give out information about former employees. Many individuals, however, will give out information anyway, but check with them first. You don’t want to be surprised later if someone you list as a reference refuses to talk to your potential employer.