Coping with a Job Layoff 101

This is a rush transcript from "On the Record ," April 8, 2009. This copy may not be in its final form and may be updated.

MEGYN KELLY, FOX NEWS GUEST HOST: The state of the American economy at this moment is scary for many people. But we are here to help you survive it. Take a listen at these sobering statistics.

First the bad news, then the good news. That's how we do it. The unemployment rate is not at 8.5 percent. Ouch. That's the highest it's been in more than a quarter-century.

And in a recent business roundtable index, 71 percent, 71, of the country's biggest CEO's see more American job losses coming in the next six months.

So what should you do to protect your money and your family just in case your job is next on the chopping block? Here with some answers is Lily Garcia, an employment lawyer and a human-resources consultant. Hi, Lily.


KELLY: This is what everybody fears most, that you get called into the boss's office and he or she said "I've got some bad news. I love you, can't pay you. You're out of here."

We do not know who this is going to happen, but you have a couple of tips for folks to prepare for this. If this, God forbid, should happen to our viewers, what is the number one thing they need to remember going into that room?

GARCIA: They need to remember to ask questions. It's a one way street. They need to find out the reasons why they are being laid off. They need to find out if that employer is prepared to do anything at the outset to assist them in their transition to another job.

KELLY: Let me tell you, having practiced law, and I used to practice employment law, the first thing we tell our clients is, when you're firing somebody, don't tell them why. Say as little as possible. Do not offer reasons, because they will come back and see you later. They will say you fired them because they are a woman or they're a minority or they have a disability, or they are over 40. So say nothing.

GARCIA: That's absolutely true. But the rules changed a little bit in the case of a layoff, in which case you want to make sure that you preserve your reputation with that employee and with your existing employees.

You want to be perceived by the employees of your organization as having been as respectful and considerate to that person as possible, and that involves sharing a little bit more information than you might normally be comfortable with.

KELLY: What about severance pay? You say be bold.

GARCIA: Be bold. Go ahead and ask for what you need. But first, ascertain what it is that you need. Before you say anything, hear what the employer has to say, hear what they have to give you. Go back home, assess your finances, and then describe what it is you need from that company.

And remember, you're being laid off because that company is probably cash poor, so that really legitimately might not have the money to give you that you think you deserve. So go in and ask for something that is sensible.

Typically, asking for two weeks for every year served for the organization is not something that employers will balk at. And you would also be well-advised to find out what other people who are similarly situated to you in the organization are getting.

So if you are a manager in accounting with three years of service, and you heard that another manager in accounting with three years of service got 12 weeks of severance pay, then it might not be unreasonable for you to ask for that. Otherwise, stick to the rule of two weeks for every year served.

KELLY: All right. Then you have an important warning to folks about health care, because, obviously, you get fired, you get laid off, you healthcare is going to end from that point. And what do you think people should do?

GARCIA: Well, in many cases, if your employer is sizeable enough, 20 employees or greater, you are going to get a COBRA notice in the mail. And a lot of people do not sign up for COBRA because it is cost prohibitive for a lot of people.

For a family play it could be as much as $1,200 a month. So they say "I am just going to forgo COBRA and wait until I get my next job."

That is a mistake, because if you have any interruption in your health care coverage, when you secure your next health plan from your next employer, there is a potential that that insurance company will either delay or deny coverage for preexisting conditions.

Under the law called HIPA, they can't do that if you have continuous healthcare coverage. So make sure you sign up for COBRA.

KELLY: --Especially if you do hat a preexisting conditions. Good to know.

GARCIA: Absolutely.

And let me mention something. Under the stimulus package that just passed, you are going to have the opportunity if you lost your job at any time from September of last year until December of this year to sign up for COBRA at a reduced rate.

So you will be able to sign up for 35 percent of what you normally pay.

KELLY: So there's a little bit of pain relief there. Lily, thanks so much. Let's hope it's all for naught, that not a single viewer needs this advice. But just in case, thank you ma'am.

GARCIA: Unfortunately, I doubt it.

KELLY: Thanks for being here.

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