Layoff Rights in the US: What You Actually Need to Know

I'm going to be honest. Writing about US layoff rights is significantly more depressing than writing about UK redundancy rights, because there are fewer of them.

I'm British but I've worked with US companies and consulted on restructurings that included US employees. The difference in employee protections is... well, it's something. The US system essentially says "employment is at-will, good luck" and then provides a patchwork of federal and state laws that sort of help, sometimes, if you know about them.

Let me walk you through what you actually have.

At-will employment: what it really means

Most US employment is "at-will," which means either you or your employer can end the employment relationship at any time, for any reason that isn't illegal, with or without notice.

That "isn't illegal" part is doing a lot of heavy lifting. Your employer can lay you off because business is slow. They can lay you off because they feel like it. They cannot lay you off because of your race, sex, age, religion, national origin, disability, pregnancy, or because you reported illegal activity (whistleblowing).

The practical problem is proving the real reason when the legal standard for "any reason" is so broad. This is why documentation matters. If you suspect the layoff is discriminatory or retaliatory, write everything down.

Some states offer slightly more protection than others. Montana, for example, isn't fully at-will after a probationary period. Your state might have additional protections. Worth checking.

The WARN Act

The federal Worker Adjustment and Retraining Notification (WARN) Act requires employers with 100 or more employees to provide 60 calendar days' notice before:

• A plant closing affecting 50 or more employees
• A mass layoff affecting 500 or more employees, or 50-499 employees if they make up at least 33% of the workforce

If they don't give proper notice, they owe you pay and benefits for each day of the violation, up to 60 days.

Several states have their own mini-WARN acts with lower thresholds and longer notice periods. California, New York, Illinois, and New Jersey, among others, have state-level versions. Check yours.

The WARN Act doesn't apply to employers with fewer than 100 employees, which is a lot of employers. It also has exceptions for "unforeseeable business circumstances" and "faltering companies," which are used more liberally than you might expect.

Unemployment benefits

This is probably your most important immediate resource. Every state has an unemployment insurance programme. File immediately after you're laid off. There is no benefit to waiting and some states have a waiting week before benefits begin.

What you'll get varies wildly by state. It's typically around 40-50% of your previous wage, up to a state maximum that ranges from genuinely helpful to almost insulting depending on where you live. Duration is usually 26 weeks, though some states offer less.

To qualify, you generally need to have:

• Worked a minimum amount of time (usually the past 12-18 months)
• Earned a minimum amount
• Been laid off through no fault of your own (quit and you usually don't qualify, fired for cause is complicated)

File online through your state's unemployment office. It takes about 30 minutes. Don't put it off.

Severance

Here's the thing Americans need to hear: there is no federal law requiring employers to pay severance. None. Zero. If your employer offers you severance, it's either because your employment contract or company policy requires it, or because they want you to sign a release of claims.

That second reason is the important one. If they're offering severance in exchange for you signing a release (agreeing not to sue them), that's a negotiation. And if it's a negotiation, you have room to negotiate. See our severance negotiation guide for how.

Some things to check:

• Does your employment agreement or offer letter mention severance?
• Does the company have a severance policy in their employee handbook?
• Are other people in the same layoff getting the same terms?

If they're offering severance, take the document home. Review it. Consider having an employment attorney look at it, especially if the amount is significant or if you have any concerns about the reason for your layoff.

COBRA: health insurance continuation

Losing your job in the US means losing your health insurance, which is a uniquely American form of cruelty that i still find baffling.

COBRA (Consolidated Omnibus Budget Reconciliation Act) allows you to continue your employer-sponsored health coverage for up to 18 months after leaving. The catch: you pay the full premium, including the portion your employer used to cover, plus a 2% admin fee. This is often shockingly expensive. I've seen people go from paying $200 a month to $800 or more.

You have 60 days from your coverage end date to elect COBRA. It's retroactive, so some people wait and only elect it if they need medical care during that window. This is a gamble but i understand why people do it.

The alternative is the ACA marketplace (Healthcare.gov). Losing your job is a qualifying life event, giving you a 60-day special enrollment period. Depending on your income (or lack of it), you might qualify for subsidies that make marketplace plans cheaper than COBRA.

Compare both options. Don't just default to COBRA because it's the form they hand you.

What to do if something feels wrong

If you believe your layoff was actually:

• Discrimination based on a protected characteristic
• Retaliation for whistleblowing or reporting harassment
• A violation of the WARN Act
• A breach of your employment contract

You have options, but you have deadlines.

For discrimination claims, you generally need to file a charge with the EEOC within 180 days (300 days in states with their own anti-discrimination agencies). For WARN Act violations, the statute of limitations is three years.

Consulting with an employment attorney is often free for the initial conversation. Many work on contingency for discrimination cases, meaning they only get paid if you win.

State-specific protections

I can't cover all 50 states here, but be aware that your state may offer:

• Higher minimum notice requirements than the federal WARN Act
• Additional protected categories beyond federal law
• State-specific rules about final paycheque timing (California requires it immediately on the day of termination, for example)
• Mini-COBRA laws for smaller employers not covered by federal COBRA

Your state's department of labour website is the best starting point for state-specific information. It won't be the most exciting reading of your life, but it might be the most useful.

The basics checklist

If you've just been laid off in the US, do these things in the first 48 hours:

1. File for unemployment benefits. Today. Right now.
2. Don't sign any severance agreement without reviewing it carefully
3. Figure out your health insurance situation (COBRA vs marketplace)
4. Check if the WARN Act applies to your situation
5. If anything feels discriminatory or retaliatory, consult an attorney before the deadlines pass

The one thing to do today: file for unemployment. It takes 30 minutes, there's no downside, and every day you wait is a day you're not in the queue. Open your state's unemployment website and start the process. Right now. Before you forget. Before something else comes up. Just do it.