Employers need to know the applicable state and federal laws that cover the employee termination process so that they can avoid making costly mistakes. In most states, employees have the right to claim unemployment benefits. In addition, the employer may need to provide the employee with Insurance under the Consolidated Omnibus Budget Reconciliation Act (COBRA) and the Health Insurance Portability and Accountability Act (HIPAA).
Unemployment Benefits
Workers who are unemployed through no fault of their own and meet other eligibility requirements, may be eligible to receive unemployment benefits. Unemployment insurance benefits are intended to provide temporary financial assistance to unemployed workers who meet the requirements of state law. Under the Federal-State Unemployment Insurance Program, each state administers a separate unemployment insurance program within guidelines established by federal law. Employees should contact their
State Unemployment Insurance agency as soon as possible after becoming unemployed.
Health Benefits
COBRA gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. Qualified individuals may be required to pay the entire premium for coverage up to 102 percent of the cost to the plan.
COBRA generally requires that group health plans sponsored by employers with 20 or more employees in the prior year offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) in certain instances where coverage under the plan would otherwise end.
HIPAA protects an employee's rights to health insurance coverage when they lose a job as well as at other times. If a spouse or dependents are covered under an employee's insurance plan and the employee becomes unemployed, the employer's insurance company (if it provides coverage to spouses and dependents) must allow for special enrollment.
Last Paycheck
Employers are not required by federal law to give former employees their final paycheck immediately. Some states, however, may require immediate payment. If the regular payday for the last pay period an employee worked has passed and the employee has not been paid, contact the U.S. Department of Labor Employment Standards Administration's Wage and Hour Division or the appropriate state labor department.
Employment Discrimination
Equal employment opportunity (EEO) laws prohibit specific types of employment discrimination. Collectively, these laws prohibit discrimination in most workplaces on the basis of age, race, color, religion, sex, ethnic/national origin, disability and veteran status. In general, if the reason for termination is not because of discrimination on these bases, or because of the employee's protected status as a whistleblower, or because they were involved in a complaint filed under one of the laws enforced by the Department of Labor, then the termination is subject only to any private contract between the employer and employee or a labor contract between the employer and those covered by the labor contract.
Veterans' Reemployment Rights
The job rights of individuals who voluntarily or involuntarily leave employment positions to undertake military service are protected under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). It applies to persons who perform duty, voluntarily or involuntarily, in the "uniformed services," which include the Army, Navy, Marine Corps, Air Force, Coast Guard and Public Health Service commissioned corps, as well as the reserve components of each of these services. Generally, the pre-service employer must reemploy service members returning from a period of service in the uniformed services.