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EMPLOYEE CHECKLIST
What You Need to Know If You Have Lost Your Job
- ASK FOR SEVERANCE. Although you are not entitled by law to receive severance, most employers are offering some form of severance benefits to employees who are being laid off. Severance can take the form of salary continuation, a lump sum payment of salary and/or benefits coverage. Expect that if your employer offers you severance that you will be required to sign a release of claims in order to receive these benefits. You may want an attorney to review the release agreement before you sign it because you will be signing away your legal rights.
- Ask for salary continuation and continuation of health insurance benefits during the severance period. This will allow you to continue your health coverage as an employee before having to secure other insurance or continuing benefits under COBRA. If your employer agrees, know that you will not be able to apply for unemployment benefits until your salary ends. Salary continuation also has the added benefit of allowing you to search for employment while still an employee of your Company.
- Alternatively, if it is more important to you that you receive a lump sum payment of severance, then your health insurance coverage under your Company's plan (if your employer provides such coverage) will usually end at the end of the month when your employment terminates. You may then qualify for health insurance coverage as an individual under COBRA. See below. Apply for unemployment benefits. The fact that you have received a severance payment does not disqualify you for unemployment insurance benefits.
- Some employers will also provide "outplacement" benefits as part of a severance package. This allows you to secure the services of a company that specializes in helping employees create a resume and search for new employment.
- Make sure that on your last day of employment you are paid your wages and all accrued and vested vacation and/or PTO. If not, file a claim with the Labor Commissioner where you can recover the unpaid wages and waiting time penalties. If you hire a lawyer to recover your wages, you can also recover your attorney's fees. http://www.dir.ca.gov/dlse
- WARN Act: The federal WARN act offers protection to employees, their families and communities by requiring employers to provide notice 60 days in advance of covered plant closings (shut down of an employment site or one or more facilities or operating units within an employment site which affects 50 or more employees during a 30 day period) and covered mass layoffs (an employment loss for 500 or more employees or for 50-499 employees if they make up at least 33% of the employer's workforce within a 30 day period). Employers are generally covered by federal WARN if they have 100 or more employees. The California WARN act requires the same 60 days notice for employers of 75 or more employees in the event of a plant closing, layoff or relocation of 50 or more employees within a 30 day period. You should question your employer if you believe that you are entitled to WARN notice.
- HEALTH INSURANCE BENEFITS: There are new rules that will help you pay the cost of your health insurance coverage under COBRA. Under the new stimulus package signed into law by President Obama on February 17, 2009 employees who lose their jobs (in an involuntary termination such as a layoff, but not a termination based on gross misconduct) during the time period September 1, 2008 through May 31, 2010 will be entitled to a government subsidy of 65% (of the monthly COBRA premium payment the former employee makes) for fifteen months provided the employee has elected to continue health insurance coverage under COBRA and provided the employee’s income in the year the subsidy is received is below certain thresholds. The full subsidy is available to single tax payers with an adjusted gross income of up to $125,000 and for married couples filing a joint tax return with an adjusted gross income of up to $250,000. The subsidy is phased out for those with higher incomes, until it is completely gone for single taxpayers with an adjusted gross income of more than $145,000 and married couples filing joint returns with an adjusted gross income of more than $290,000. Employees eligible for the subsidy will be required to pay 35% of the COBRA premium during the nine month period of time to qualify for the government subsidy. The typical COBRA coverage period may last from 18 to 36 months and starts on the date the person is first eligible to elect COBRA coverage. The subsidy does not extend the total period of time for which someone is eligible for COBRA. This new subsidy not only applies to health plans covered by COBRA, but also to certain health plans of small employers (between 2 to 19 employees) covered by state COBRA-type laws as Cal-COBRA. Employees who are involuntarily terminated from employment during this period of time must receive notification from their former employer (or the third party plan administrator used by the employer to send COBRA notice and election forms) of your rights under this new law. If you do not receive the notification, call your employer immediately. This is just a brief summary of this provision of the law. If you have further questions or concerns you should consult with an attorney.
- CHANGES IN UNEMPLOYMENT INSURANCE BENEFITS IN CALIFORNIA. Unemployment benefits have been increased as a result of the new stimulus package. In California, recipients of unemployment benefits will receive a supplemental $25 per week added to regular benefit checks. This additional benefit will continue to be paid until July 3, 2010. In addition, the stimulus package increased the number of weeks an eligible employee may receive benefits from 26 weeks up to an additional 73 weeks or a total of 99 weeks. http://www.edd.ca.gov
Keep checking back for additional information that will help you navigate through these new laws and benefits.
Click on the link of the top of this page to see Brenda Biren’s appearance the ABC’s The View from the Bay in a segment "Laid Off? Know your Rights," in July 2009.
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