Unemployment Benefits for Layoffs
Layoffs are a common practice for companies who have to cut their budgets or downsize their operations. It's a difficult situation for the employee because you're losing your income because of something you can't control. In most cases, you can receive unemployment benefits to help you cope with the loss of work until you find another job or your employer calls you back to work. If you receive a severance package with your layoff, it may decrease or delay your unemployment benefits.
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Layoff
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A layoff is a situation where your employer fires you for reasons that have more to do with his business than your performance. For example, companies usually do layoffs when business is slow and they can't afford to keep all of their employees on. Layoffs often happen to more than one employee at once and can often affect large numbers of them. Whether layoffs are temporary or permanent, you may qualify for unemployment benefits while you're not working.
Unemployment Benefits
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If you experience a layoff, typically you will qualify for unemployment benefits for your state because you are unemployed through circumstances beyond your control. You must also meet the other benefit qualifications, which can vary depending on your state. Be sure to check with your state's labor office, which you can find through the U.S. Department of Labor's website, for any other eligibility requirements (see Resources). When in doubt, always apply for the benefits. The labor office will review your application and let you know if you meet the requirements.
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Figuring Benefits
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In most states, you'll receive about half of what you earned on an average week during your base period, which is the first four of the last five calendar quarters before you filed for unemployment. For example, if your average weekly salary during that time was about $400, you'll receive about $200 per week from unemployment. In some cases, you can also receive additional funds for any dependents you have, such as a spouse or minor child.
All states break down their unemployment benefits into weekly amounts, but whether you receive payments each week or biweekly depends on the state's distribution model. Benefits are distributed either by direct deposit into your bank account or a prepaid debit card sent to you by mail. Very few states still offer the option to mail you a paper check for your benefits.
Severance Pay
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Sometimes a company will offer severance packages to the employees it lays off. If your employer has this benefit, you'll receive several weeks of your salary paid to you in addition to the ones you worked in a lump sum on your last paycheck. Severance pay is income for the week it represents, so you must report it to your labor office when claiming benefits. Depending on your weekly benefit amount, your severance pay amount and the state in which you live, you may still qualify for benefits on the weeks you collect severance. Once the severance pay runs out, you begin collecting your normal unemployment benefits.
Re-Employment
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In some cases, your former employer may offer you a new position in another location or ask you to come back to work once he can afford to pay your salary again. One of the requirements of receiving unemployment is that you actively seek work and take any reasonable offer of work. If you turn down any offers of work from your former employer, you must report it to the labor office when you claim your benefits. They'll review the information to determine if the offer was reasonable or not.
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