How Is Getting Fired Different from Getting Laid Off?

• Getting fired occurs when an employee does something wrong. Layoffs happen for reasons outside of an employee’s control, like downsizing or budget cuts.
• Laid-off employees may be eligible for severance pay, medical benefits, and state unemployment benefits. Fired employees are usually not.
• If you are fired or laid off, read your termination paperwork and confirm eligibility for severance pay or benefits. Apply for new jobs as soon as you’re ready.

Differences Between Getting Laid Off & Getting Fired

Being fired is an employee’s fault, but layoffs are beyond their control. Employees get fired when they’ve done something wrong or performed poorly at work. Layoffs, on the other hand, occur when a company terminates employees for reasons unrelated to their job performance, such as downsizing or budget cuts. A fired employee usually can’t receive severance pay or state unemployment benefits. They’re also unlikely to get re-hired at the same company. Common causes for getting fired include poor job performance, consistently not meeting the key objectives, breaking company rules, failing to report to work, frequent lateness, or inappropriate conduct. A laid-off employee may be entitled to severance pay, medical benefits (such as keeping their health insurance), and state unemployment benefits. They may also get rehired by the same company for a different position. Common reasons for layoffs include changing business needs, company mergers and acquisitions, budget problems or lack of funding, downsizing, or an economic downturn.

What to Do If You’ve Been Laid Off

Ask your employer why you’re being laid off. Calmly ask for a specific reason, such as budget cuts or corporate restructuring. Have them affirm that your termination is not due to poor performance or personal misconduct, and that your position is no longer available (and there are no other positions available). Lastly, ask them to confirm your last date of official employment. Ask for an explanation in writing, such as via email or a formal letter. This documentation can be useful in the future, such as in obtaining state unemployment benefits

Verify whether you’re entitled to severance pay and benefits. “Severance pay” is money paid to an employee after being laid off from their job. If you’re eligible for severance pay, ask what the amount will be and how long you’ll be receiving it. If your organization provides medical insurance, confirm whether you can keep your insurance for your current premium. If you’re not offered severance pay, ask for it. Your company may be willing to provide it, depending on your role and the terms of your employment contract. Not all organizations offer severance pay, and those that do may only offer it to certain employees. Ask your company’s payroll department to confirm when you’ll receive your last regular paycheck (not including severance pay). For instance, if your termination is effective immediately, your next paycheck may come during the next pay cycle. If you cannot keep your medical insurance for the current premium, you can keep it and pay the full premium via the Consolidated Omnibus Budget Reconciliation Act (COBRA) for up to 18 months.

Talk to Human Resources before signing severance paperwork. Have someone from your company’s HR department explain the terms of your severance agreement. If you are receiving severance pay, ask if there are any conditions attached to it. For example, you may automatically stop receiving severance pay if you find a new job. Read your severance agreement carefully and raise any concerns with HR. If HR is not able to help or is unable to address your concerns, have an employment attorney review the agreement to ensure that the terms are fair and legal. If you have a company retirement plan, such as 401k, as an HR representative how to transfer it to another plan. Follow their instructions and transfer your plan as soon as possible, or have your HR team do so.

What to Do If You’ve Been Fired

Ask your employer why you’re being fired. Ask for feedback on your performance, conduct, or any other factors that affected their decision. Though the conversation may be difficult, this information can help you understand your mistakes and do better in the future. Confirm that you are being fired, not laid off. This is important since laid-off employees may be eligible for certain benefits, like severance pay, but fired employees are usually not.

Ask about keeping your benefits, such as medical insurance. While you won’t be eligible for severance pay, you can keep your medical insurance through COBRA, even if you got fired. If so, you’ll have to pay the full premium, which may be very expensive, but you may feel it’s worth it. Ask your company’s HR department to confirm if this is an option. If you have a retirement plan, like a 401k, ask your HR representative to explain how to transfer it to another plan. They may be able to do this for you, or they may provide instructions for doing it yourself.

Read your termination paperwork carefully before signing it. Confirm your official termination date and the reason for your termination. Contact the payroll department to confirm when you’ll receive your last paycheck. Have an HR representative explain the terms in the paperwork, including anything involving payment or benefits. Depending on your state, you may be eligible to receive payment for unused vacation days. For example, employees in California must be paid for any unused vacation days unless their employment contract says otherwise. Florida-based employees, on the other hand, don’t have this right. If anything in the termination agreement seems problematic, raise your concerns with HR. If possible, have an employment attorney review the agreement to ensure that the terms are legal and reasonable.

Job Hunting after Being Fired or Laid Off

Assess your finances, including savings and all expenses. Determine how long you can live off your current savings, if possible. Create a detailed budget to determine where you can cut back on expenses. If you’re receiving severance pay or unemployment benefits, factor this income into your calculations. If necessary, accept a part-time job to make ends meet until you land a full-time role. Note that you may lose any severance pay or unemployment benefits if you obtain part-time work.

Apply for unemployment benefits if you’re eligible. Find your state’s unemployment insurance website on this list. Click your state’s site, then follow the onscreen instructions to determine your eligibility, the amount you’ll be paid, and how long your benefits will last. Each state has its own laws for determining eligibility for unemployment benefits. You can only receive benefits if you’re unemployment isn’t your fault. This includes being laid off. If you were fired or left your job voluntarily, you won’t be eligible for unemployment benefits. Don’t hesitate to seek unemployment benefits if you’re eligible. Even a small amount of money will make things easier in the short term, financially speaking.

Begin searching for a new job as soon as you’re ready. Prepare your resume and look for openings in your field. Review job boards and listings online, or reach out to former colleagues and employers for job leads. Consider job training or extra schooling as well if you believe it’ll improve your prospects. If you were laid off, ask your former managers and colleagues for references. You should still be able to count on your former employer for support, as long as you left in good standing.

Take stock and learn from your mistakes. If you were fired, take time to reflect on your previous performance. Consider how you could do better in your next job, whether that means working smarter, harder, or being more collaborative. If you were laid off, reflect on the good work you did. Think about where you want to go next and how to find a more secure position in your field. It’s possible that your previous job was a bad fit for you, whether you were laid off or fired. If so, reflect on your strengths and consider what kinds of roles you’d be better suited for.

Be honest during job interviews. When interviewers and applications ask “Why did you leave your last job?” tell the truth. Layoffs are common in many fields, and interviewers encounter laid-off employees all the time. Even getting fired is not the end of the world, especially if you demonstrate that you have learned from the experience. Keep your explanation brief and upbeat, whether you were laid off or fired. Don’t speak poorly about your previous employer during the interview, on social media, or among your professional circle. This may reflect poorly on you.

Stay positive and take care of your mental and physical health. Being unemployed can be incredibly stressful. To make things easier, take steps to keep yourself happy and busy. Spend some of your free time volunteering, learning a new skill, or reconnecting with friends and family. Keep applying for work in the meantime. Remember that a job search takes time. Be diligent and patient—you’ll land a full-time role, eventually!