It’s unfortunate that while the oilfield and construction industries experience times of great prosperity, they also face situations in which companies shut down and employees are laid off due to shortage of work.
Those caught in the ebb and flow of these businesses must take steps to protect themselves from an impending lay-off.
Hearing the news that you are going to be laid off can be shocking and stressful. It’s important in those times to stay focused and look ahead in order to financially secure your future.
Should you find yourself in this type of situation, here are 5 things you can do to protect yourself:
1. Verify Your Last Paycheck and Inquire About Vacation Time
As soon as you find out that you are going to be laid off, inquire as to when you will receive your last paycheck and verify that the amount is correct. The last thing you need to be doing coming into a lay-off is fighting to get pay that you are owed.
Always look into your unused vacation days. In the United States, there is currently no federal law that required companies to pay out unused vacation time when laying off employees – however, many states do pay you for unused vacation time that you have accrued.
In Canada, employers are legally obligated to pay you for unused vacation time.
If you have been working for an American company, take a look at your employee handbook to see what their policies are on unused vacation time and what you are entitled to.
2. Take Your 401(K) or RRSPs With You
Although you have few options of what to do with company-related investments after you leave, it’s important to take that money with you.
In the United States, you can roll your 401K into an IRA (Individual Retirement Account), which can offer more flexibility than a company plan, or into your new employer’s plan. This will keep all of your savings in one place.
In Canada, you can leave your RRSPs with the financial institution that the company was using or transfer them to a difference institution.
Just verify how much of those savings you are entitled to – sometimes employers will contribute to them as well in a group plan situation. D
Double check your company’s “vesting” period, which is the period of time you have to work for the company in order to be entitled to that portion.
No matter what you decide to do with these savings, make sure you take them with you.
3. Don’t Sign Your Severance Right Away
As with any legal document that requires your signature, you want to know exactly what you are agreeing to before you sign. Since severance agreements are designed to protect the company, you may be able to negotiate for more.
If you’ve received a severance package that seems to be offering a low-ball settlement, you should speak to a lawyer before signing.
Sometimes the stated reasoning for the layoff may give you leverage for negotiations.
For example, is there a certain age demographic (such as all workers over 50) that are getting laid off? Did the company state a “last in, first out” policy that they are not following? Are you pregnant?
If you think for any reason you are being discriminated against in relation to the lay-off, you may be able to negotiate for a better severance package.
Even if there are no grounds for discrimination, and the company refuses to budge on dollar amount, you can always ask for other things such as a letter of recommendation or outplacement services.
4. Check Your Unemployment Eligibility
As long as you are not terminated, or “fired”, from your job with cause, you should qualify for unemployment insurance.
Verify how many insurable hours you have accrued and don’t hesitate to file for it. The process can take a few weeks to get started so you want to file as soon as possible.
Sometimes, a company may ask you to resign during layoffs. Absolutely do not agree to this unless their severance package is more valuable than unemployment hours.
5. Check Your Health Insurance Coverage
Make sure to ask about how long your health insurance plan will remain in place. Some policies will remain active until at least the end of the month since you’ve likely paid until the end of the month.
Until that point in time, it’s important to explore your health insurance coverage options.
You may end up with extended health coverage included in a severance package. If not, you will have to shop around for an individual health care plan.
Keep Looking Forward
Getting laid off is a stressful and devastating ordeal. However, as long as you keep looking forward and prepare for your time off, you can alleviate many financial pressures.
You’ll be looking at a smoother transition from the job you had into the new one you will find.