How to Survive a Layoff

Survive a Layoff

These are scary times.  With the pandemic in full force here in the US, many families are facing the intimidating reality of surviving on one fewer income. Or worse, two fewer incomes.

My husband and I have been fortunate enough to have jobs we can perform from home. And, since I work for a payroll processing company that also does HR consulting, we are an essential business.  That doesn’t mean we’re free from the effects of the economic downturn, though. We’ve been carefully thinking through our plans to survive a layoff in the event that one or both of us suffer such misfortune.  We are being extra careful about our savings, among other things.

My Layoff Experience

Even though we don’t have much concern over being laid off at this point in time, I have experienced the fear and uncertainty that comes with being laid off.  In fact, the reason I’m with my current company today is because I experienced a layoff in my last job.  I worked in the residential solar industry before I moved to business services. My company was one of the many that didn’t survive the 2016-2017 upheaval to the market when the solar incentive programs were up for review and renewal.

I went from being one on a team of 10 HR professionals to being the last HR person in the company. I laid off hundreds of employees before my own turn finally came.  In the end, I actually had to lay myself off.

Because we anticipated such an end, what with several rounds of layoffs over an eight-month period, we were able to prepare at least somewhat for the event in advance.  I stopped using any vacation time in anticipation of receiving it when I left the company. I polished my resume.  We had plans to fall back on minimum payments. Fortunately, we had enough in savings that, when coupled with unemployment insurance, gave us enough to survive for about four months.  We were also fortunate that the overall economy was booming and it was a candidate’s market at the time.

Preparing in advance is great, but what you do to survive a layoff after it happens is also important.  As an HR pro, I have a couple additional tips to bestow upon those of you who are the recipients of this unwelcome news.

Ensure Your Final Check is Complete

When you leave, make sure that your final check includes all the hours and wages owed to you.  In some states you have to receive your final check at the time of separation.  Other states have different rules, such as payment by the next regular payday, or within three calendar days, etc.  Know what the law is in your state, and be sure to check that all funds are accounted for.


If your company pays out PTO on separation, or if your state requires it, make sure it appears in your final pay.  Look it over before you leave if necessary, and make sure you have any questions answered.  Some states also have reporting time laws.  This means if you show up to work, and you can’t complete your scheduled shift, you’re paid a specified number of hours.  In California you would receive half your scheduled hours, at a minimum of 2 hours and a maximum of 4.


Your employer is allowed to deduct your full month’s benefit premiums from your pay.  Say you are paid weekly and are separated the first week of the month. Your employer may deduct your portion of your benefit premiums for all four weeks for that month.  This is because your employer has already paid the premium for your benefits for that month and are entitled to reimbursement.  Your benefits are nearly always effective through the end of the current month. But you should check with your HR department to make sure that’s the case.

Ask Your Manager or the HR Professional More About the Layoff

Especially if your layoff has come as a surprise, you will want to understand more about the layoff.  Why is it occurring?  What is the total number of people being laid off in your location?  Are they anticipating more layoffs in the next 30 days?

The WARN Act

Why do you need to know this, exactly?  This is because of a lesser-known law called the WARN Act.  It stands for the Worker Adjustment, Retraining, & Notification Act.  This is a federal law that helps employees prepare for layoff. It also helps states understand when to expect an influx of people entering the ranks of the unemployed.

The WARN Act covers employers who have at least 100 employees. When they are laying off at least 50 people over a 30-day period, they must provide affected employees with 60 days’ advance notice. Alternatively, they can provide 60 days’ pay in lieu of notice.  This doesn’t apply if there were unforeseeable circumstances that would prevent the company from knowing it would need to lay off a large number of people. At the beginning of the pandemic, the WARN Act notice requirements likely wouldn’t have applied. But as the pandemic rages on, the need to lay off employees is more and more foreseeable.

This is a very general summary of the law and it is MUCH more nuanced.  I could easily spend 5,000 words talking about this law. But rather than turn this post into an HR lesson, I will simply recommend that you read up on how the WARN Act works. Learn what your rights are under this law. This will help you understand whether you should submit a claim to be paid for the required notice period.

Keep in mind that many states also have their own mini-WARN acts with more restrictive laws for employers to follow.  In California, for example, the employer threshold size is 75 rather than 100.  Start with the federal law, and then look for similar state laws.

Apply for Unemployment Insurance Right Away

Some people have a sense of pride about “living off the state,” but you shouldn’t think of it that way.  Unemployment compensation is actually an insurance program into which you do pay premiums via your taxes—although the state does administer the program.  If you qualify for unemployment compensation, there is no need to feel guilty about taking it.  It’s the same as paying premiums on your car insurance.  Why would you feel guilty about using it when you’ve paid for just that?

The Benefits

Most states have a waiting period as well as some job search requirements.  Your unemployment department will require you to submit documentation every week or two in order to continue receiving your benefit.  Make sure you are following the rules for your state.

Right now, with the COVID-19 pandemic going on, an additional $600 per week is available to claimants. This means you can get a lot closer to the income you were making when working. Some people would be making even more than they were when they were working.  The extra $600 per week goes away as of July 31, 2020, though.

Many states are also waiving the waiting period for benefits, which means you can have no lapse in income at all.  I don’t know how long such a thing will last, so now is the best time to take advantage of the waiting period waiver.

The state still has to process your claim, though, which means you may end up waiting several weeks for payment.  The removal of the waiting period simply means they will pay back wages to the start of your claim once processed.  You may still need to plan your financial survival for the first few weeks while they process your claim.

Take a Couple of Days to Recover from the Shock

Surviving a layoff isn’t just financial–it’s emotional. Going through a layoff, especially one you weren’t expecting, is a huge shock for you to process.  Give yourself permission to spend a day or two working through your emotions.  You might be angry, fearful, depressed, or overwhelmed.  All of these emotions are normal in the face of losing your income, and you need to process them in order to effectively move on.  You can’t make good decisions while you’re in emotional upheaval.

Don’t spend too long on this, though. There’s work to do.

Adjust Your Budget

Obviously, this includes cutting back immediately on some costs.  For example, in my home we have an adventure fund that I contribute $150 to every month. This allows us to go out as a family every couple of months and do something fun like an escape room, a rodeo, or a nice dinner out, without having to feel guilty for spending the money.  But in the face of a layoff, I wouldn’t simply I stop contributing money to this fund. I would immediately siphon any unused funds in this account to my savings account.

Unnecessary clothing purchases, eating out, expensive hobbies, and fancy foods or alcohol from the grocery should be cut out immediately. You can’t survive a layoff if you’re spending the same as if your income were the same.

Perhaps less obviously, if you are paying down debt like we are, you are probably spending a lot of extra money on that.  In a time like this, you should pause and revert to your minimum payments.  This ensures your savings stretches as far as it will go in tandem with your unemployment compensation.

Review the Assets Available to You to Survive a Layoff

Hand-in-hand with looking at your liabilities (i.e., your budgeted bills), you should be looking at the assets available to you.

Review the funds in your savings account.  Do you have things you can sell off if you need to later, and how much would those be worth?  How much are you eligible to receive on unemployment?  Did you receive a severance payment at the time of layoff? Or do you anticipate a severance payment in the coming weeks?  (Most severance payments have a waiting period of a few weeks. This covers the revocation period they have to offer you by law.  After you sign, expect a two- to three-week wait for your check.)  Did you have PTO saved up that is being paid out to you?

I would only look at borrowing against your 401(k) as an absolute last resort.  Taking from your future has severe penalties attached to it that can affect your ability to survive when you’re too old to work. Obviously, if this is your only option, you can take it. But I would look at most any other option first.

Once you’ve tallied your assets, tie them to your new budget to determine how long you can get by with what you have.

Tell Your Billers You’re Trying to Survive a Layoff

You may not do this right away if you have a fair number of assets you can use to get by over the next few months. But once you are down to a month of stability, you should contact your billers and explain your situation.  Most billers can offer forbearance or work out a payment plan with you until you are back on your feet.

Call all of them, even if you only have one or two bills you really need to have stalled or reduced.  I look at this the same way as I look on falling back on your minimums. Since you don’t know how long you’ll be in your situation, you should play it safe. Keep your bills at the most manageable level possible.

Figure Out What to Do About Benefits

When you lose your job, you often lose your benefits by the end of the month.  This can be especially devastating if your layoff is at the end of the month, and if you have medical conditions that require special medication or regular doctor visits.

If you work for a company with at least 20 employees, you can continue your benefits with the company. This is the law under COBRA, and you can usually keep your benefits for up to 18 months. In some cases you can stay on your employer’s plan for up to 36 months. The catch is that you will be required to pay for the full premium without any employer subsidy you may have had while you were employed. On top of that, most employers charge an administration fee of 2% of your premium cost.  So if your monthly premium is $400, you would be required to pay $408 per month.

Many people cannot afford to stay on their employer’s medical plan after separation since the premium costs can be quite high. If you work for a smaller company, you may not be entitled to continue your benefits. This will depend on whether the state you live in has any mini-COBRA laws.

In either of these cases, you should be looking at your options for Medicaid, your state medical programs, the marketplace, or perhaps being added to your spouse’s medical plan if applicable.

Polish Your Resume

Now might be the time to have a professional look over your resume and make sure it’s effective.  I could talk about resumes for eons, but to stay on topic, I’ll just say that spending a little bit in this area may be good for you as an investment in your next job.

Spending a couple hundred dollars in this area at this point in time is likely a bad move. But if you know a pro who will look at it for $50 to $75 and make solid recommendations for improvement, I think that’s a fair trade and a worthy investment.  I know that not everyone who has been laid off can afford such a service. If this is absolutely not in your budget at all, skip it. But ask your network if someone, maybe in HR or recruiting, can lay a professional eye on it and give you some pointers.  Your resume is a critical sales tool to get your next position.  Do not slack in this area.


Once your resume and cover letter are ready, ensure everyone knows you are looking for work, the type of work you are looking for, and what your background is.  Perhaps nobody in your network knows of a job opening, but maybe they know someone who knows someone.  You never know where your next job will come from, so cast that net wide.

Also be sure your networking efforts aren’t costing you anything.  Reaching out to people on LinkedIn costs you nothing. Take the time to do it right and to make it personal and not necessarily all about you.  Hopefully you network regularly.  If you do, this will be much easier for you, but if you don’t, now is the time to start.

Grab a Part-Time or Temporary Job, or Start a Side Hustle

If you have a lot of time on your hands, it doesn’t hurt to temporarily take on some part-time work. Part-time work that will generate a little income, if you can get such a job.  Bagging groceries, making sandwiches, and cashiering at minimum wage are all fine options. You’re just trying to supplement your other assets until you can find a full-time position earning what you need.

Many people opt not to work these gigs while on unemployment. They don’t like that their unemployment is reduced by the amount they earn when they are underemployed. But I’ll tell you a secret. You’re still eligible for partial unemployment and that unemployment is stretched out until you max out your benefit.  Let me explain.

Unemployment Benefits and Part-Time Work

In most states, your benefit is about two-thirds of the earnings you made while employed, up to a cap.  They multiply that by 26 weeks (six months) to determine how much you can earn for that period of unemployment.  Let’s look at an example.

Let’s say you would earn $300 per week based on your unique earnings and situation.  They multiply your weekly rate by 26 weeks. That is the maximum you can earn on unemployment before your benefit ends.  Once your benefit ends, you have to work some more and pay more into the system in order to use it again.  In this example, your maximum benefit is $7,800.  If you use the full benefit for six months straight, you use it up in six months.

But, if you work part-time hours and earn, say, $100 per week, they will reduce your weekly unemployment payment to $200 per week.  Most people think they lose out on free money this way. What actually happens is that your total benefit stays the same ($7,800), and they simply stretch out the benefit period.

Your unemployment wouldn’t stop after six months in this case.  You are still entitled to the full $7,800 over time. In this example, you could stretch your unemployment benefit to 39 weeks!  This means you have a cushion for longer.  As long as you are underemployed, having a part-time gig is a benefit to you and not a detriment to your unemployment eligibility at all.  Find part-time work and stretch your unemployment money out for longer!

Your Mileage May Vary

Obviously, you will want to check on the rules for your state to make sure this is consistent for you. But you should educate yourself on your unemployment eligibility.

Personally, even if this did adversely affect my unemployment benefit, I’d rather be working. A part-time job can help me for longer than unemployment and can fill in gaps on my resume.

Start Developing Your Own Business

If a layoff teaches you nothing else, it teaches you to diversify your income streams.  I think everyone should look at other ways to earn income, even while employed. If you haven’t done it before, you now have extra time on your hands (even with your intensive job searching).  This is the ideal time to start doing your own thing!  If you’re not sure what that thing is, try something out, fail, and try again. The next time you have to survive a layoff, you’ll be in a better position.

Seek Assistance

Unemployment insurance compensation is usually the first type of assistance we look for. But for those who are in truly desperate situations, you can also look into SNAP, WIC, housing assistance, and other types of programs.

And don’t stop with government assistance programs.  I personally couldn’t be comfortable asking family for money. But I would absolutely ask a mechanic uncle to look at my car that needs fixing. Or to accept help from a family member in the form of babysitting so I can go out on job interviews.  Now is not the time for pride, and you can always return the favor when they need help themselves.  That’s one of the beautiful things about having family and friends—they are a support system.

Churches are another great resource for additional help to survive a layoff.  I haven’t ever had a need to ask for assistance from a church or other non-profit help organization, so I’m personally unsure how those programs work. But your community is also there to help. If you feel guilty about accepting help, you could also do some volunteer work as a way to give back yourself. Or you could offer the program a healthy donation when you are back on your feet.  The give-and-take of such programs is a beautiful thing.

Don’t Give Up

However it all goes, you will find that you are far more resourceful than you realize.  Whenever possible, if you foresee a possibility of layoff, you should begin immediately making plans about how you will conquer the situation. But even if a layoff comes as a complete surprise to you, the above steps should give you confidence and a sense of self-control over your destiny.  And it should, because you do.

You’ve got this.

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