Employee Rights Regarding Past Employment

Employees who leave a job -- whether they are fired, laid off or quit -- have certain rights regarding severance pay, unemployment insurance, health insurance and wrongful termination. Discharged workers should document the circumstances of their termination and request the reason for their dismissal in the event they pursue a lawsuit against the employer.


Employees, unless covered by employment contracts, have no guarantee against getting fired. According to the Doctrine of Employment at Will, at-will employment assumes employment is voluntary by all parties. Employees may quit their jobs when they want, and employers can discharge a worker for any reason.

Laid Off

A layoff generally affects more than one employee and is done for economic reasons. Workers are protected from being fired illegally under the guise of a layoff. An employer may be required to provide advance notice of a layoff, allowing employees to begin a job search. The federal Worker Adjustment and Retraining Notification Act requires employers to provide up to 60 days notice before a plant closing or other widespread layoff. An employer who is required to honor the WARN notice and fails to do so is subject to legal action for damages.


An employee may quit a job at any time, even without giving advance notice, but an employer can withhold benefits or delay the last paycheck if no advance notice is given. An employer can fire a worker during the advance-notice period. Quitting a job generally does not allow the former employee to receive unemployment insurance benefits, unless the resignation was for a cause such as a hostile work environment.

Unemployment Insurance

Unemployment insurance benefits are paid by each state through taxes. Employees who are terminated, whether through firing, layoff or plant closing, are generally able to file claims for state unemployment benefits. The amount paid varies by state, but benefits generally include job-search assistance.

To qualify for unemployment benefits, the former workers must not have been fired for misconduct or quit voluntarily, must have been employed for a specified period and must have earned a specified minimum amount of money. Former employees must also be available to search for a new job and willing to take new employment when offered. An unemployed worker can have a year to collect the allowed benefits and may interrupt the benefits to take temporary jobs.

Health Insurance

Workers whose employment has been terminated may be entitled to buy a temporary extension of their group health insurance benefits for themselves and dependents under the federal Consolidated Omnibus Budget Reconciliation Act. Unless the employee was fired for gross misconduct, COBRA benefits can be extended to former employees who resigned or who were fired or laid off. The law requires that employers who have 20 or more workers and who provide group health insurance must also provide temporary extended benefits to employees and beneficiaries.

Severance Pay

Some terminated employees may be entitled to severance pay in the form of salary and other money owed by the employer. So it won't interfere with unemployment benefit payments, such severance pay must be identified as a supplement to state benefits. A severance package can also include health insurance benefits under COBRA. Employees can be asked to sign severance agreements or nondisclosure agreements that waive certain rights, including the right to sue. Employers are not required by law to offer severance, but an employee can try to negotiate for it.

Wrongful Termination

Employers can fire employees for any reason, or for no reason. However, an illegal discharge can constitute wrongful termination, also known as illegal or unfair dismissal. Such terminations may involve violation of state or federal discrimination laws, violation of Constitutional rights, breach of contract, violation of the employer's discharge policy, public policy violation, labor union issues, taking leave under the Family and Medical Leave Act and retaliation for whistle-blowing.

An employee can file a complaint with a government agency or seek an attorney's advice about filing a lawsuit. The former employee should consider whether the damages sought justify the expense.