UNEMPLOYMENT

It is rarely pleasant to have to leave a job.  Many terms are used to describe the process of laying off workers  Downsizing and reduction-in-force (RIF) are popular terms.  Federal and state governments have enacted legislation to minimize the negative impact of being out of work.  This legislation relates to workers’ compensation, unemployment benefits, and health care insurance.

            Workers’ compensation is somewhat like an insurance program.  If you experience a life- or limb-threatening injury while on the job and must leave work for a long period of time, you could qualify for workers’ compensation.  State and federal laws require corporations to supply this insurance to their employees.

            Unemployment compensation is meant to provide a safety net for people who are temporarily out of work.  If you lose your job through no fault of your own and meet certain eligibility requirements, you are entitled to monetary payments for a certain period of time.  The program is paid for by taxes collected from workers.

            The Consolidated Omnibus Budget Reconciliation Act (COBRA) and the Health Insurance Portability and Accountability Act (HIPAA) were designed to help displaced workers cope with changes in health insurance coverage when changing jobs.  One of the biggest problems when leaving a job can be losing your health coverage benefits.  COBRA allows you to purchase insurance at your employers’ group rates for 18 months or more after you leave the company if certain criteria are met.  HIPAA expanded this protection by ensuring that people cannot be denied health insurance for preexisting medical conditions and other reasons.  Your HR representative and government agencies will help you understand all these benefits.

            Many employers offer severance pay to employees affected by RIFs.  Severance pay packages usually include cash payments that match a certain number of weeks, months, or years of salary.   Some people will only work for a corporation that offers severance packages and makes such packages part of the initial employment contract.