By Abigail Everett, Jonathan Tepe, and Danya Rangachar
In recent months, mass layoffs have shaken various sectors of the economy.
Major companies have implemented widespread workforce reductions in an apparent response to rising costs, economic uncertainty, and shifts in consumer behavior. While companies must respond to these economic changes, many use mass layoffs as a cover for unlawful terminations.
A closer examination into mass layoffs also reveals the disturbing reality about their disproportionate impact on people of color, women, and people over the age of 40. And even when mass layoffs occur in the absence of discrimination or retaliation, many employees are unaware of their rights to essential benefits and compensation for recent work.
In this article, we provide guidance on navigating mass layoffs to help workers secure the compensation they deserve and recognize signs of wrongful termination, discrimination, and retaliation.
Potential Legal Claims
You may have legal claims against your former employer if you believe you were included in the layoff for an illegal reason. Federal and state laws protect against discrimination of people who have one or more protected characteristics. If you feel you were included in a mass layoff for one or more of the following protected characteristics, you may have a case for discrimination:
- Race
- Gender
- Age (40 and older)
- Disability
- Ethnicity / National Origin
- Religion
- Sexual Orientation
- Gender Identity
- Pregnancy
- Veteran Status
Many states have their own anti-discrimination laws that may provide additional protections for characteristics such as citizenship, marital status, familial status, height, and weight.
Employers may also use mass layoffs to retaliate against employees who engage in a protected activity. It is illegal to fire an employee because they complained about discrimination or certain violations of the law. An employee is also protected from termination in retaliation for attempting to form a union or bargain collectively. If you recently engaged in a protected activity only to find yourself included in a mass layoff, you may have a case for retaliation.
Final Pay and Benefits
After being included in a mass layoff, you have specific rights to your final pay and benefits, which are often protected by state and federal laws. These rights ensure that you are fairly compensated and receive what you are entitled to as you transition out of employment.
Your employer must pay you all wages you earned, usually by the end of your next regular pay day or within a few weeks following the date of termination, depending on your state’s laws. Your final wages usually must include any vacation pay or other compensatory time that is owed to you.
Your employment benefits, like insurance coverages, will likely end after your termination. You should consult your plan documents to determine when your coverage will end and whether you are entitled to continued benefits coverage. You are also may be entitled to temporarily continue your health insurance under the Consolidated Omnibus Budget Reconciliation Act (COBRA). You should receive a COBRA election notice about continuing your coverage within 44 days of your termination, and you will have a period of 60 days to decide whether to continue your coverage.
You may be eligible to receive unemployment benefits. If you are eligible, you may apply to your state’s unemployment benefits program online.
Severance Agreements
Severance pay is not legally required under federal law unless outlined in an employment contract or collective bargaining agreement. However, many companies offer severance packages to laid-off employees to reduce the risk of legal claims.
You should read any severance agreement you are offered carefully, as it will likely require you to release any legal claims you have against the company and could impact other important legal rights. It is best to consult with an attorney before deciding whether to accept any severance.