Dear Readers —
Here is the second part of our special column on job loss. (For Part I, click here)
Again, we cannot continue to provide personal advice for every situation — but if you read the following recommendations you'll see there is a pattern as to the steps you should take if you think you've been treated unfairly by a former employer.
If you work in the technology field or have been given stock options, don't miss the last letter!
Dear Gail —
I wished you had published this column last October, the month I was laid off from my job at a semiconductor company. I was able to relate to many of the issues you covered.
I agree with you wanting to quietly leave because you are devastated and will sign anything and hide your head under a pillow once you get home. Tough times and lack of sales in our group was the reason used for my dismissal.
However, there were 10 people on the team. Why was I the one laid off when others were more directly responsible for bringing in sales? I don't mean to sound so bitter, but just a month before being fired, I received an "excellent" performance review and a raise. I really feel that politics with the higher-up managers got in the way and that my boss used me to cover himself for the poor performance of his department.
Today I feel happy because learned that my old boss was himself was laid off along with the rest of his team.
However, the bottom line is I feel I was fired for no grounds.
Thank you again for your column,
The first thing you have to accept is that in our society, we allow employers to cut back on staff in tough times.
The real question, as you point out, is why were "you" chosen?
"Politics reigns supreme," says Sklover. "The courts have said it's OK to base hirings and firings on who the boss likes. This is human."
In other words, if your employer lays you off, but keeps her boyfriend on the payroll, that's her prerogative. It doesn't matter that you are ten times more knowledgeable than he is. Politics and personality are totally permissible reasons for hiring and firing. Those which are NOT permissible are reasons related to gender, age, disability, race, religion and other specifically protected categories.
So what do you do? In Sklover's words, "Become "Mr. or Ms. Essential Employee."
I know this was a painful experience for you, but the best thing you can do is chalk it up to experience and move on.
I used to work as a contract language specialist for an employment agency based in New York City. They contracted my services for two federal law enforcement agencies. I worked for them as an interpreter and as a transcriber for seven years.
But after Sept. 11, things changed and I have not had any assigments here in New York.
I went to the agencies to whom I had been providing my services to and asked if they would hire me directly. But I was told they cannot do this unless I have been without work for one year. That was my agency's policy. Is this true?
Dear Napoleon —
Yes, this probably IS true. In fact, it's common with placement agencies. You should carefully read the contract you signed years ago. The clause is included to prevent the client you are contracted to from hiring you directly and cutting out the employment agency and its commission.
If a client wants to hire you without waiting a year, it usually has to pay the placement agency a new fee — usually a substantial one. But you don't have to be unemployed for a year in order to be hired outright by a former client. You simply cannot work for that client for a year.
If you really want a full time job with one of the federal agencies you've worked for, then don't accept any more jobs with them. After a year, they're free to hire you without paying any "finder's fee."
I'm a doctor. I was recently terminated as a surgical assistant at a major health provider. I had worked there 14 years and received no severance because they claimed I was a contract employee. My 7 a.m. to 3 p.m. job had health benefits, a pension, tax-deferred annuity and they withheld taxes.
The only contract was a document signed in 1989 that specifically covered on-call additional employment for which no benefits were paid. As a licensed MD, I cannot afford to relocate.
Working in a clinic is not an option as I cannot afford malpractice coverage. Finally, I had a total knee reconstruction, which limits some physical activities. However, I do not have a formal medical disability authorization.
I have no health coverage at this time because I can't afford it! Which means I also can't afford expensive legal advice. I'm sure the "Big Corporation" and its attorneys will drag out any claims.
Dear MBM —
Attorney Alan Sklover says the company's argument that you were never really an employee, but an independent contractor, is pretty lame.
"Many companies have tried to limit benefits and expenses by putting people in this category," he says.
Regardless what "Big Corporation" calls you, the IRS uses 17 factors to determine if someone is a contract employee. These include things such as: Does the employer tell you what hours to work? What to do? Do you work exclusively for this employer or for several?
"It's a matter of control and exclusivity," says Sklover. If the company has the right to tell you what to do and when to do it and how, you're probably an employee. If you were an independent contractor, you could tell them "I can't make it Tuesday. I'll be back on Thursday."
However, if the employer has control over your services and exclusive right to them, then the courts generally decide you are, in fact, an "employee" with all the rights of one.
Sklover says yours sounds like the classic case of someone who has been an employee for 14 years and is due all back benefits. He recommends you contact your state department of labor for help. According to Sklover, "You appear to have a lot of leverage in this case because you're not the only one who was treated this way. Big Corporation would probably be willing to settle with you rather than risk having the state labor department audit all their employment records."
What have you got to lose?
I am writing because I was laid off from my job at a major cosmetics company on March 1. I was told it was due to budget cuts. I worked there for nearly two years. Although I've been gone for more than a month, I have yet to receive any COBRA information or my final paycheck.
In fact, they seem to just be ignoring me.
Dear NT —
Since your employer is apparently ignoring your phone calls, put your concerns in writing and send the letter via certified mail so you have a record of it being received.
Every employer in the United States with 20 or more employees must offer COBRA (Consolidated Omnibus Budget Reconciliation Act) coverage to exiting employees. Under this, you are given the opportunity to extend your health coverage for up to 18 months. You, not your former employer, pay the premiums.
You have 60 days after termination to accept or reject coverage under COBRA. However, if you never received a notice about your right to continue it, this timeframe is extended.
Alan Sklover, who practices in New York City, says, there's a chance your former employer has been sending the information to the wrong address. Nonetheless, "Without questions you should contact the state labor commission and get your concerns on the record," he says.
With regard to your article on layoffs, when Alan says they want something in return in order for you to get your severance package, does that mean you have to sign the paper in the exit interview?
Dear Kari —
No. NO! NOOOOOOOOOO!!!!
Let me say this again just to be crystal clear: Do not EVER sign anything in your exit interview!
"That is the single biggest mistake you can make," says Sklover, "because you are generally shell-shocked. You're in the worst position to negotiate."
Instead, take the severance package home. Think about it. Talk with your spouse. Contact an attorney if you feel you need to. The goal is to give yourself some breathing room so you can consider things from a less emotional perspective.
I am speaking from experience as I have been laid off from more than one pre-IPO startup company in the past 4 years. I have found that one of the most important things that they desire from the employees that they are going to lay off is their "silence". Being a startup, they are very vulnerable to bad news resulting from a former employee. This could affect analysts' opinions of the company. The startup or pre-IPO company doesn't want the rest of the world to know that it's in trouble. Why else would they need to lay employees off or fire them???
My advice to anyone being laid off a smaller company that relies on excellent market coverage, good opinions of investors and technical market analysts:
1) You were probably granted stock options when you were hired. If you feel that the company has the opportunity for turning itself around or is open for a buyout by a larger company, you do not have to accept the company's standard "you are not vested in your options and cannot have them" statement". The board has the power to grant your options at your buy-in rate.
2) You do not have to accept the standard "severance package". If they offer you 2 weeks, then they are offering the minimum that the CFO feels is appropriate.
3) Your outstanding vacation time GOES WITH YOU, in one check!!!! They usually have those checks already cut and ready for distribution to you. If you can't get what you want on an individual basis, then try collective bargaining with all of the employees being laid off. The last thing the company wants is for a group of their former employees to go work for a competitor. Those employees already know how to work together, already know multiple facets of the company and product and are an even BIGGER commodity to a real competitor.
It just takes a little guts, determination and belief in oneself.
Dear Brett —
While most employees and probably many companies believe you are entitled to accrued vacation pay when laid off, in fact it is not necessarily the case. It comes down to whether this is covered as part of a union contract or under state law.
For example, Alan Sklover points out that in New York state you are only entitled to unused vacation pay if you earn $30,000/year or less. (You read that correctly!)
"Most employers do give you unused vacation, but most don't know they don't have to," says Sklover.
And be very careful what you say about leaking company secrets once you're gone. As Sklover points out, "Extortion is a crime. If you threaten to says things about your employer — even if they're true — unless they pay for your silence, you could go to jail."
If you have a question for Gail Buckner and the Your $ Matters column, send them to email@example.com along with your name and phone number.
The views expressed in this article are those of Ms. Buckner or the individual commentator, and do not necessarily reflect the views of Putnam Investments Inc. or any of its affiliates. You should consult your own financial adviser for advice regarding your particular financial circumstances. This article is for information only and is not an offer of the sale of any mutual fund or other investment.