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You're Losing Your Job. What Are Your Rights?

8 things to know before handing over your employee ID

Businessman packing up office supplies. What you need to know when you've been laid off. (Daniel Grill/Getty Images)

It's important to be aware of your rights and options if you lose a job. — Getty

En español | The atmosphere at your job has been toxic, as rumors fly that there's a round of layoffs looming. So you keep your head down and hope you keep your job.

But when that call comes from the boss or human resources, you know you are joining the ranks of the unemployed.

Your mind starts to race and the reality of the situation hits you. How will I get my next job? Will I receive severance pay? Whom can I ask for references? You feel angry, hurt or even in a state of shock. But making a graceful, educated and professional exit is critical. Keep these things in mind when you are being let go.

1. Carefully review a severance agreement

There's no law that requires an employer to give you severance pay, although some companies have a formal severance policy. The point of a severance agreement is usually to keep you from suing for wrongful termination down the road.

Donna Ballman, author of Stand Up for Yourself Without Getting Fired: Resolve Workplace Issues Before You Quit, Get Axed, or Sue the Bastards, says not to feel pressured to immediately sign anything put in front of you. Your soon-to-be former employer can't make you sign it.

"You don't work there anymore," Ballman says. "What are they going to do? Fire you again? You can say no to anything you want now."

A severance agreement could also contain a noncompete clause that prevents you from working for the competition. This is obviously a huge stumbling block for landing a new job. Be clear on the restrictions you're agreeing to in exchange for a severance payout. Be certain you aren't giving up vested benefits. The agreement should clearly state the status and amounts of your 401(k), stock options or pensions.

Your best move is to tell the human resources contact or your boss that you want some time to evaluate any severance agreement. If you're over 40, your employer has to give you at least 21 days to review the agreement, or the company may not be able to get a release of your age discrimination claims, Ballman says. If you sign a release, that means you're giving up your right to sue your employer, so make sure what it's offering you is worth what you're giving up.

2. Get copies of anything you sign

Your employer may ask you to sign your final disciplinary document. Here's Ballman's expert advice: "Ask for a copy and tell them you want to review it. If they won't give a copy, take good notes about what it says (or snap a photo with your camera before they have time to snatch it away).

If you sign, get a copy. It may tell why they say you were fired. This could be evidence for a potential lawsuit against them, and you might need it for unemployment or other assistance benefits." Also, if you sign, Ballman suggests signing "As to receipt only" so that your former employer can't say you agreed to the document.

3. Be wary of signing a resignation letter

Unless the firm is giving you a generous payout to leave, never sign a resignation letter if you've actually been fired. You may be giving up unemployment benefits, and the letter can be used against you if you claim you were fired due to discrimination or whistleblowing or in breach of your contract, Ballman says.

While some people think it's better to tell potential employers they resigned to save face, Ballman disagrees. "If you left without another job lined up, who do you think you are fooling?" Few people in this economy leave jobs unless they are forced out or have other jobs lined up.

4. File for unemployment

If you're fired or laid off, most states have a set time you must have worked in order to qualify for unemployment. If you are eligible for benefits, take them. Apply by contacting your state's unemployment insurance agency as soon as you are fired or laid off. Some states permit you to file a claim by telephone or online. Generally, you should file your claim with the state where you worked.

Don't be self-conscious. It's not embarrassing to collect unemployment. You're entitled to it.

5. Check your credit

According to a survey by the Society for Human Resource Management, six out of 10 private employers check the credit histories of at least some of their job applicants.

Pull your credit report before a prospective employer does, and clean up any errors. Visit to request a free credit report from each of the three major consumer credit reporting agencies — Experian, Equifax and TransUnion.

One in 10 Americans has been denied jobs due to information in his or her credit report, according to a survey of about 1,000 low- and middle-income households with credit card debt.

You must give your potential employer your consent in writing to request your credit report. And the company has to tell you if you lost out on the job because of your credit history. Importantly, the company must give you the opportunity to explain the black marks or dispute the incorrect information. My guess, however, is that the company is more than likely to say it changed what it was looking for in a candidate for the position, or give a general and indirect explanation for why you were passed over.

A handful of states, including Washington, Oregon, Hawaii, Illinois, Maryland, Connecticut and California, have cracked down on the practice.

6. Do a background check on yourself

Google your name to find out what potential employers might be able to learn about you from your virtual footprint. Since you are going to be out job hunting, be sure your social media accounts don't cast you in an unflattering light. You might also consider hiring a professional reference-checking company to find out if your former employer is saying something bad about you, Ballman says.

7. Consider skipping the exit interview

Some employers request you do an exit interview, but Ballman says they can't make you do this. She suggests not doing the interview unless the employer offers to pay you for your time. The purpose of an exit interview is for your employer to protect itself in case you later file a lawsuit. If you do have an accusation before you get the ax or quit, be sure to have those allegations laid out in writing and put in your human resources file while you're still employed, in case you opt to take action in the future.

8. Hold your tongue and take the high road

If you're fired and told to leave immediately, don't make a fuss. Leave without tearful goodbyes with coworkers or mean-spirited notes to clients. Do ask to be allowed to pack up your belongings.

You can ask the reason for your firing, but don't expect one. Unless you have a contract saying you can only be fired for cause, under federal law your employer doesn't have to give a reason for firing you. Some state unemployment statutes require the employer to give you general reasons (layoff, discharge and so forth.)

Moreover, under federal law the company doesn't have to give you a letter or written notice of termination. (Some state laws and contracts do require the company to give you a termination notice.) Even more egregious, the company doesn't have to give you a reference or even return the calls of a prospective employer.

It's tempting to blast your supervisor or complain about incompetence on your way out, or say something you will regret later. "Don't blow it by failing to act strategically," Ballman says. "Your coworkers or boss may end up at your new place of employment."

Kerry Hannon, AARP jobs expert, is a career transition expert and an award-winning author. Her latest book is Great Jobs for Everyone 50+: Finding Work That Keeps You Happy and Healthy … and Pays the Bills.

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