Understanding Your Legal Rights Upon Employment Termination

Navigating severance, health coverage, unemployment benefits, and receiving your final paycheck.

Transitioning out of employment, whether it’s your choice or the result of a discharge or downsizing, requires a clear understanding of the rights and benefits owed to you. The Merrick Law Firm LLC is here to guide you through the process.

Understanding Severance Pay

There are no legal mandates enforcing severance pay for terminated or laid-off employees; however, it’s common practice for employers to offer severance packages under certain conditions. Employees who exit due to organizational changes not attributed to their own fault might receive compensation, often equating to one or two months’ salary. Tenured employees might be eligible for more substantial sums, correlated with their years of service.

While severance pay is not universally obligatory, your employer must honor any existing agreements, which can originate from:

• A written employment contract with stipulated severance terms
• Severance pay promises in employee handbooks or policies
• Established precedence of severance payouts to other departing employees in similar roles
• Verbal commitments for severance, though these can pose proof challenges

Severance discussions can extend beyond financial compensation. In potential negotiations (perhaps prompted by disputes around your departure), it’s worthwhile to address additional benefits:

• Health Insurance Contributions: While laws like COBRA provide options to continue existing health insurance, these usually come at the full premium cost to you. However, a severance package might include employer-covered premiums.
• Uncontested Unemployment Claims: An arrangement where the employer will not challenge your unemployment insurance claim can facilitate smoother access to benefits.
• Outplacement Assistance: Employers may cover services to aid in employment transition, offering job search support, skill-building, and other resources.
• Agreed References: Develop an agreed-upon reference from your employer, helpful particularly when exiting under contentious conditions.

Final Paycheck Legalities

Departing employees must receive their final paycheck within a timeline dictated by state laws. This schedule can vary if an employee resigns versus being fired or laid off. Additionally, state-specific regulations may determine if unused vacation time compensation is obligatory. For precise information, consult with your state’s labor department or reach out to Merrick Law Firm LLC for guidance.

Health Insurance Post-Employment

The 1986 Consolidated Omnibus Budget Reconciliation Act (COBRA) and parallel state laws mandate health insurance continuation options regardless of voluntary or involuntary employment termination, barring instances of gross misconduct.

Under COBRA, workers from companies with 20 or more employees can maintain group health plan enrollment for up to 18 months post-employment, bearing all premium costs. This coverage can also extend to dependents, with potential extensions up to 36 months under certain circumstances.

Your state’s continuation laws might provide additional or superior benefits compared to COBRA. Employers must comply with the law which offers the greatest benefit to you. For specific state law details, contact your state insurance office or labor department.

Unemployment Insurance Benefits

In the event of job loss, unemployment benefits can offer partial income support, typically for around 26 weeks, with possibilities for extensions in certain situations. It’s important to note that only those who are unemployed without fault on their part are eligible for these benefits.

The information presented here serves as a baseline overview and is not a substitute for personalized legal advice. Laws continuously evolve, which is why Merrick Law Firm LLC strongly recommends consulting with a qualified attorney to understand how up-to-date laws affect your individual circumstances.

For legal assistance and to have your questions addressed directly, please call Merrick Law Firm LLC at (312) 269-0200.