Considerations

• When facing job termination, the best approach is to determine the eligibility benefits earned before actually leaving the premises. Individuals covered by collective bargaining agreements or employment contracts should have an understanding of their rights under the contract. For example, some employment contracts include severance pay that workers may have a right to collect. Federal and state workers should also know what benefits they have a right to in the event of employment termination.
  
  

Types

• Generally, employees terminated from their jobs can receive the following benefits: continued health care coverage, last check, back pay and pension or retirement funds. Under some conditions, an individual may have eligibility for bonuses and severance pay. As along as the termination did not occur because of misconduct, the person may file for unemployment benefits.
  
  

Features

• Individuals receive unemployment benefits through the state’s unemployment insurance program. The majority of states make 26 weeks of payments with possible extensions COBRA require employers with 20 or more employees to offer terminated employees health insurance coverage for a period of 18 months. Generally, the individual has the responsibility of paying for the coverage, but some companies may make payments for a specific time as a part of a severance package.
  
  ERISA provides workers protection for retirement plans and ensures employers follow certain guidelines. Depending on the type of plan, workers have the right to get a lump-sum distribution of the money accumulated. A 401k plan, for example, allows individuals to receive lump-sum payments. Defined-benefit plans may stipulate workers meet an age requirement. Other benefits may consist of continued life insurance coverage for a specific period and allow conversion from group to individual coverage.
  
  

Time Frame

• The law for receiving certain benefits may vary from state to state. For example, Ohio state law requires employers to pay the last check within 30 days. However, employers have 60 days to make payment for vacation accrual or a bonus payout. Texas requires employers to remit the final paycheck within six business days or the next workday if closed for business.
  
  

Expert Insight

• In order to receive certain contributions to retirement benefits from their employers, workers must be “vested.” This means having worked long enough to qualify to receive the employer’s portion. According to the Internal Revenue Service, individuals who receive all or a portion of the vested retirement money, or a distribution in which they directly receive the money, may have to pay income taxes and early-withdrawal taxes.