Steps To Take After Being Laid Off
Last week a few of my friends were laid off, unexpectedly. Of course you can say but all the signs of an economic downturn are here, people should expect to be laid off. Sure, but it doesn’t make it less shocking when it happens to you. The reality is that more and more people are being laid off, the Labor Department announced on Thursday that it had reached a record number of unemployment claims filed in one week at 3.3 million.
If you’re one of those individuals who has experienced job loss due to COVID-19, I want to share some steps you can take.
First, I want to remind you to take a deep breath and realize this is not a personal attack on you or your work. That being said, it’s completely fine to be upset and angry so don’t push your feelings to the side. Feel your feelings.
Shortly after the video or phone call, you might receive paperwork to sign, take your time sending this back and don’t sign anything until you and another trusted person read it through thoroughly. If you still have access to your device, transfer any important files that you created and will help build your work portfolio in the future. This is not an excuse to steal confidential information from your company.
Once you get the basics out of the way, you need to create a plan of action. This includes how you’re going to deal with your money, health insurance, and career.
Money
It might seem like there is nothing in your control. I mean you were just let go after X amount of months/year/decades. Let me remind you that yes, you still have power in your financial future. There will be better of course, but do not give into a defeatist attitude.
Here are the things in your control when it comes to money:
Lower at your expenses - Find out what your minimum or bare bones expenses are. What in your spending can you completely remove immediately after finding out that you were laid off? Anything non-essential (housing, food, and maybe transportation?) should. Remember, this is isn’t a permanent action. Once you are in a better place, you can add these expenses back into your life.
What do you own (things and money) - Count everything in your pockets and bank accounts. Take inventory of what things around that house you can sell for money. Right now might not be the best time to sell things since we need to self quarantine, but it would help you to know when the time comes to do so.
Check your retirement account - I realize that a lot of people might not have a investment accounts with funds, but if you do, just calculate what this total is IN CASE you are in DIRE need of cash. I do not look at your retirement accounts as emergency savings. This money should not be touched unless you absolutely need to and in that case, you should note that as part of the COVID-19 stimulus relief package, the federal government will waive the 10% early withdrawal penalty. The other options for your 401k specifically include, leaving the money in your former employer's plan, rolling it over into another tax-deferred account such as an individual retirement account, or, when you get a new job, transfer it into your new account (this is not an immediate action).
Look for a temp job - I’m not talking about your career job, this is something quick and temporary to keep you afloat for a bit. Because selling something for quick cash might not be an option right now, but there are other opportunities that might be available to you. Whether it’s customer service support, tutoring, or copyediting, these can all be done online and might be more project-based.
Your Tax Refund - If you filed your taxes and are expecting it, it’s time to determine how you will use it. This will go towards your bare essential expenses. If you haven’t filed your taxes, the deadline has been expenses till July 15, 2020.
Debt - Your cash flow is crucial right now, so while I normally wouldn’t say this, right now it's okay if you simply stick to your minimum payments.
Here’s what you need to asking your employer in terms of money:
401k Matching & Vesting - If your former employer offered a percentage of your 401k contributions, you need to find out if you will receive any of these. Most companies have vesting rules, which means that there's a stipulation before you can receive the amount your former employer would have contributed. Of course, what you contributed is yours, but if your company offered a match that might not be coming with you. Therefore, it's important to check on this (if that's relevant to you).
Will You Receive a Severance. By definition a severance package is pay and benefits employees may be entitled to receive when they leave employment at a company unwillfully. It’s not a guarantee. Find out if your company pay you for a certain period. If not, ask if they will. Bring this up or negotiate, this could be based on the time you've been at the company.
Resources and benefit available from the government:
Unemployment benefits - Qualifications for unemployment insurance vary by state, but experts say you should apply if your ability to earn an income has been impacted by this national crisis. You'll have to pay income taxes on any unemployment benefits you receive, but the cash can help keep you afloat for up to 26 weeks. The amount you receive is based on your past income and employment situation. Also in the COVID-19 stimulus relief package, the federal government is allowing states to expand eligibility for unemployment benefits. It includes reasons, such as, your employer had to temporarily shut down operations, you’re currently being quarantined, but expect to return to work after. According to NYS Labor Department, New York now qualifies for this extension. This might take some time though as there has been an influx of claims being filed.
Stimulus Paycheck - Also as part of the relief package, the federal government passed a $2 trillion dollar that includes sending direct paychecks to Americans. The maximum amount you can receive is $1,200, or if married filing jointly, $2,400 per couple. That amount phases out for single filers with an AGI (average gross income) between $75,000 and $99,000, joint filers with an AGI between $150,000 and $198,000 and heads of household with an AGI between $112,500 and $146,500. Those who qualify for the $1,200 credit will also receive an additional $500 for each qualifying dependent 17 years old or younger. Here too, don't hold your breath as this money might not come immediately.
Other benefits - Applying for other government benefits like SNAP or Supplemental Nutrition Assistance Program will be extremely important if you don't have money for your basics needs, like food.
Health
Okay - I'm not going to dive too deep into these but you have options when it goes to health insurance. Albeit not great ones. I joked to Ari the other day that we'll need to get married if he wanted to keep insurance because the sad reality is that health insurance in the U.S. sucks.
If you're worried about losing your health insurance talk to your former employer about extending these benefits. This could be something included or negotiated in your severance package.
COBRA - If your employer had over 20 employee they must by law offer health insurance coverage through COBRA to terminated employees for 18 months. You will need to pay for this coverage but it will be your same insurance coverage.
Obamacare - This will completely switch over your coverage, but might be the cheaper option.
Career
Yay! You’ve given yourself time to feel all your feels and now you're ready to take action. So where do you start?
Connect - With your former colleagues and your network. Don't make a public service announcement about being laid off but call or email people individually. Let them know your situation has changed and that you're actively looking for opportunities.
Update your LinkedIn profile - Make sure your profile has the most up-to-date information and that you’re using keywords in your industry and asking for recommendations. LinkedIn will be your best friend during this process.
Join community channels - I'm a member of different community groups where people are constantly posting about opportunities and more willing to refer you because of the connection to the organization. These are some of my favorite; Ladies Get Paid, Mimconnect, Techqueria, and Latinas In Tech.
Update that resume - Like with your LinkedIn profile, this should be updated with your most recent position. When you’re done, ask a friend to spot check for grammatical errors. Tip: use a keyword search to make sure that your resume matches the words that are showing up in the job description you're reading. I use this page to copy and paste my both documents to generate keywords.
I hope these recommendations/ things to think about will help you as your transition and I wish you the best of luck in your journey. If you have any additional tips to add or what to reach out with specific questions about your situation, email me at firstgenmoney@gmail.com.