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Know Your Rights When Faced with Layoff

In March 2013, the state's unemployment rate declined to 7.6 percent, which is better than in recent history. However, employees would agree that the job market remains grim. While businesses struggle to survive, affected employees must be aware of their rights when faced with an employer's announcement of a layoff.

Q:  I’ve been told my job is being eliminated as part of a reduction in force.  What should I do?
A: 
First, ask questions. Most companies are willing to provide information regarding the necessity for the reduction in force. Understanding the reasons for the layoff may help you to cope with the job loss and explain the situation to potential employers. 

Then, ask about the possibility of reassignment or reemployment. Make sure the company is aware of your current skills and ask about job openings in areas of the company unaffected by the layoff. If you are a union member, your representative should be able to explain to you any rights you may have to be reinstated.

Also, check your employer's policies for payout of unused leave, such as vacation leave and sick leave. Finally, if your selection for layoff was not performance-based, request a reference letter. 

Q:  I understand my company will ask me to sign a separation agreement. Why?
A:
  Companies may present departing employees with a separation agreement that defines both parties’ rights and responsibilities regarding your separation from employment. This agreement usually will require your signature, acknowledging that you have had an opportunity to consult with an attorney, and that you understand and agree with its terms. Make sure you understand your rights and responsibilities. Severance agreements usually include a term stating the employee agrees to not bring a lawsuit against the company. Look for the following provisions:

• Severance Pay. Some companies provide departing employees with severance pay for a period of time. Severance pay may be distributed in a lump sum or may be paid out over time. You may wish to consult an accountant aboutt he tax consequences of lump sum payments versus extended payouts. 

• Benefits. The separation agreement may explain your rights regarding continuation of benefits, such as health insurance.  Normally, departing employees must elect, in writing, to continue health coverage for a brief period of time. This requires timely payment of the entire premium. Each of your dependents is entitled to be notified about requirements for continued health insurance participation. 

The agreement may also explain your rights regarding retirement programs you may have participated in. Talk to your accountant or financial advisor about how best to handle transfer of rollover or retirement funds. Early withdrawal of funds will normally result in a tax penalty.

• Waiver of Claims. In exchange for severance pay or other benefits to which you would not normally be entitled, your company may require you to agree not to bring legal action against it. If  your agreement includes such a waiver or release of claims, ask your attorney what this might mean for you.

Q:  When and how can I apply for state unemployment benefits? 
A:  Ohio unemployment benefits are available to most laid-off employees. You should file for benefits as soon as you become unemployed. You can find more information at http://unemployment.ohio.gov or 1-877-OHIOJOB.


5/15/2013

Law You Can Use is a weekly consumer legal information column provided by the Ohio State Bar Association (OSBA). ​This article was originally prepared by attorney Maryellen Corna Reash of Reash Law Offices in Columbus, and was updated by Columbus attorney Stacy Pollock of Fishel Hass Kim Albrecht, LLP.  ​​

Articles appearing in this column are intended to provide broad, general information about the law. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.

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