What Benefits are Employees Entitled to After Termination?

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Leaving a job, whether intentionally, by being fired, or through circumstances beyond your control (such as layoffs), is almost always tinged with at least a little (and often a lot) of stress. One of the biggest concerns faced by many in this position is what sorts of benefits they are entitled to? Will their insurance continue? Are they guaranteed a severance? What happens if they cannot immediately find a job?

One of the first things to remember in many of these situations is that how you leave a job can have a big impact on how the employer will feel about you and how cooperative they may be in providing benefits after the end of the employment relationship. Also, the reason for leaving can have an impact on what benefits you may be entitled to receive. Laws vary from state to state regarding what benefits must be provided after employment ends. Thus, before you leave your job, you will want to know what benefits you are eligible for.

In every state you are entitled to receive some benefits by law. An employer may choose to provide additional benefits above and beyond those mandated by state or federal law. Before you leave (unless you are being escorted out of the building) you should ask about severance pay, and whether payment is made for accrued vacation, overtime, and sick pay. Of course, you may also be entitled to other benefits like continuance of health and life insurance benefits. If you have one, you will also want to know about pension benefits. Finally, and perhaps most importantly, you will want to determine your eligibility for unemployment insurance.

If you have specific questions about which benefits will be afforded you under state or federal law, you can either contact a local attorney experienced in employment law, or you may wish to talk to your state's labor department.


When quitting a job, providing two weeks notice is customary, even if the employer does not ask for notice. Also, it may not always be easy, but it is best to tell your boss about your decision in person. Try to remain cordial and stay positive about your experience with the employer, as you may need a reference in the future and it will help to keep them from feeling resentment toward you that could lead to an arbitrary denial of benefits.

Generally, those who quit may not receive unemployment insurance or severance given that any resulting unemployment is intentional. Nevertheless, you may still be able to receive other benefits, like continuation of health and life insurance, payment for vacation and sick time, and transfer of your pension. Of course, generally those who quit a job do so because they have procured another, so the need for other types of compensation are less pronounced, but it never hurts to ask what your employer's policies are and to consult with your local state authorities or an employment attorney regarding what the employer will be obliged to provide you.


If you get fired, on the other hand, things can be a little more stressful. Sometimes there is a personality conflict, sometimes it just turns out that you are not the right match for the job. Whatever the case, try not to take it too personally. Indeed, it may turn out to be the best thing that could have happened to you in the long run. But, in the short term, you need to swallow the hurt feelings and embarrassment and thank the same employer who just fired you for the opportunity to work together. Leave on a positive note and try to let them feel just a little guilty for letting you go after how well you handle leaving. This will likely make them feel more generous when it comes time to discuss unemployment compensation.

In most jurisdictions, those who are fired may be entitled to unemployment compensation provided that they were not fired for bad acts, like stealing, repeated disregard of the employer's rules, or any sort of violence at the workplace. Usually, unemployment benefits will be administered by a state agency that will review the application, determine eligibility, and provide the employer the opportunity to respond as to the reason for the firing.

In addition, if your employer has over 20 employees it will be required to offer health insurance coverage through COBRA to terminated employees for 18 months. You will need to pay for this coverage, though in some cases employers may pay for coverage for a limited time as part of a severance package.

A severance may also be offered to ease the employee's transition, but this is usually not mandatory. Also, entitlement to vacation and sick time becomes a little more murky depending on the circumstances of the termination, the laws of the local jurisdiction, and the employer's policies.


Similarly, a lay-off, can be equally devastating to not just you as you lose your job, but also to the company, itself. Lay-offs usually happen as a company experiences some downturn in its fortunes, meaning it is likely the company will have less to share with its former employees who are losing their jobs. When you find out that it is coming, ask what benefits terminated employees are eligible for, and whether unemployment insurance, health insurance, pension benefits, and severance pay will be available. In most cases, the company has no obligation to offer a severance package, but, depending on circumstances and the reason for the lay-off, it is not out of the question.

Again, when you have questions regarding these matters, you can consult with your state's labor department or contact a local employment law attorney. A directory of attorneys is available under the “Law Firms” tab above.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.

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