What to do after being laid off: the first steps, in order

The first weeks after a layoff come with deadlines that can cost money if they're missed: unemployment, health coverage, a severance agreement. This page puts them in order, with the official page for each rule. It's general information, not legal or financial advice.

1. Collect your papers

Ask for anything you didn't get: a written separation or layoff notice, your final pay details, your benefits end dates and any severance agreement. Keep everything in one place with the dates you received it. Don't sign a severance agreement yet (step 6).

2. File for unemployment

File with your state's unemployment agency as soon as you can. Most states also require a weekly work search while you claim; see the work search requirements by state, built from each state's official pages, or get a state unemployment checklist kit with an Excel weekly log (Alabama, Arizona, Arkansas, California, Colorado, Connecticut and 36 more). In New Jersey, see laid off in New Jersey.

3. Check your final paycheck

States set their own rules on when a final paycheck is due after a layoff, and some cover unused vacation. Look up yours on our final paycheck laws by state table, or work out the date with the final paycheck due date calculator.

4. Choose health coverage before the deadline

According to the U.S. Department of Labor, COBRA generally lets you keep your employer's group health plan for up to 18 months after a job loss if the employer has 20 or more employees; you can be charged up to 102 percent of the plan's cost, and you have at least 60 days to elect it. Many states have continuation laws for smaller employers. Source: U.S. Department of Labor, EBSA: A Worker's Guide to Health Benefits Under COBRA.

According to HealthCare.gov, losing job-based coverage generally qualifies you for a Special Enrollment Period, usually 60 days before or after the loss, to enroll in a Marketplace plan, and you may qualify for savings or for Medicaid or CHIP depending on income. Dropping COBRA voluntarily outside open enrollment doesn't qualify you for a Special Enrollment Period. Source: HealthCare.gov: People with coverage through a job (if you lose job-based coverage).

Which is better depends on your premiums, doctors, prescriptions and income; compare the real figures from your notices and quotes.

5. Decide what to do with retirement accounts

When you leave a job, a 401(k) or similar plan commonly lets you leave the money in the plan (if it allows), roll it over to another plan or an IRA, or take it as a distribution. The IRS explains that a rollover generally must be completed within 60 days, that a plan paying you directly generally withholds 20 percent while a direct rollover doesn't, and that amounts not rolled over may be taxable, with a possible additional 10 percent tax under age 59½. Source: IRS: Rollovers of retirement plan and IRA distributions. The Department of Labor's U.S. Department of Labor, EBSA: Retirement Savings Toolkit has more. Ask the plan administrator about your options and any plan loan before you decide.

6. Have a lawyer review any severance agreement

The Department of Labor notes that severance pay is a matter of agreement between employer and employee, not a federal requirement (U.S. Department of Labor: Severance Pay). An agreement may ask you to give up legal claims or accept other terms, with deadlines. Bring it to an employment attorney before you sign; we can't give legal advice.

7. Build a bare-bones budget

List what will come in (unemployment, any severance, other household income) and what must go out, and work out your monthly gap and how many months your savings cover. Call lenders or utilities early if a payment will be hard to make.

8. Restart your search with a routine

Set a one-line job target, update your resume and track every application and follow-up. Our career services page has the Job Search Kit, field-specific resume guides and a done-for-you resume rewrite. When the interviews come, see how to explain being laid off in an interview.

Do it yourself, or have it done

Questions

General information, not legal, financial, tax or benefits advice. We are not lawyers or financial advisers. Your state agency, your plan administrators and your own notices have the final word. MCC Solutions isn't affiliated with any government agency.