A layoff is sudden, public, and exhausting. The decisions you make in the first 7 days have outsized effects on what happens next: your severance, your unemployment claim, your health insurance, your equity, and any potential legal claims. Most people get blindsided and just sign whatever is in front of them. The protection is in slowing down by 48-72 hours and running the checklist.
This is not a guide to processing the emotional weight — that is real and matters. This is the operational checklist: what to file, what not to sign, what to download, and what to ask for.
The federal baseline
A few federal protections kick in automatically:
- WARN Act: Employers with 100+ employees must give 60 days' notice of mass layoffs (50+ employees at a single site, or 33% of the workforce). No notice means you may be entitled to pay in lieu of notice.
- COBRA: Employer-sponsored health insurance must be offered for continuation, generally up to 18 months. You pay the full premium plus a 2% administrative fee.
- OWBPA (age 40+): Severance agreements that release age-discrimination claims must give you 21 days to consider (45 in a group layoff), 7 days to revoke, and written notice advising you to consult counsel.
- WARN-related state add-ons: Some states (NJ, NY, IL, CA) have stronger notice thresholds and state-level severance requirements that stack on top.
- Whistleblower / agency-charge carve-outs: You cannot waive your right to file with the EEOC, NLRB, SEC, OSHA, etc., regardless of what a severance agreement says.
State variations worth knowing
California: Mini-WARN Act applies to employers with 75+ employees at any one site; 60-day notice required. Final paycheck must include all earned wages on the day of termination. Unused vacation must be paid out. Non-competes in severance are largely unenforceable.
New York: State WARN requires 90 days' notice for mass layoffs (stronger than federal). NJ requires severance pay (1 week per year of service) for qualifying mass layoffs.
Texas: Generally follows federal WARN. Final paycheck due within 6 calendar days for involuntary terminations. Non-competes can be enforceable within reasonable scope.
Step-by-step: what to do in the first 7 days
1. Get the termination details in writing (today)
Ask for a written confirmation that includes: termination date, reason given, last day of pay, last day of benefits, severance offer (if any), unused vacation/PTO payout, and 401(k) vesting status. Decline to sign anything beyond the termination acknowledgement on day one.
2. Download what is yours (within 24 hours)
Before access is revoked, download personal data: pay stubs, performance reviews, signed agreements (offer letter, equity grant, severance plan if any), benefits enrollment forms, your contact list (within company policy), portfolio work you authored that you may need for future job applications. Do not take confidential employer data.
3. File for unemployment (within 7 days)
Most state UI offices ask you to file within the first 1-2 weeks. Late filings can reduce or delay benefits. File even if you receive severance — in most states severance does not disqualify you, only delays the start date.
4. Calculate your runway (week 1)
Pull together: cash on hand, severance amount, unused PTO payout, UI benefit estimate, COBRA monthly cost vs marketplace alternatives, any pending bonuses or commissions owed. Many people overpay for COBRA by months when an ACA marketplace plan would have been cheaper.
5. Do not sign the severance on day one
You have a legal right to time. 21 days minimum if you are 40+. Even if you are under 40, ask for at least 7 days to review. Common script: "I want to take this home and review carefully. I will follow up by [date]."
6. Review and negotiate the severance
Read carefully for: non-compete and non-solicit scope; release of claims (broad? carve-outs?); reference language; equity treatment; cooperation obligations; tax timing. Severance is negotiable in most cases. Common asks: more pay or longer duration, employer-paid COBRA for 3-6 months, accelerated equity vesting near a vesting cliff, mutual non-disparagement, narrowed non-compete, prorated bonus.
7. Talk to an employment lawyer before signing
For severance above a few thousand dollars, a 1-2 hour consultation usually pays for itself. The lawyer can spot problematic clauses, evaluate potential discrimination/retaliation claims that the release would waive, and often negotiate on your behalf.
Red flags to watch for
- You are pressured to sign "today" or "in the next few hours"
- Severance amount looks calculated to buy silence about something specific
- Non-compete is written broader than your actual job scope
- The agreement bundles severance with amounts you are already owed (final paycheck, accrued PTO, vested bonus)
- Whistleblower or agency-charge carve-outs are missing or worded ambiguously
- You are 40+ and the agreement does not give you 21+ days to consider and 7 to revoke
- Reference policy is vague or open-ended
- Confidentiality clauses prevent you from discussing discrimination/harassment (unenforceable in CA, NY, others)
- Layoff disproportionately affected protected groups (older, pregnant, disabled, recent FMLA users) at your level
When to talk to a lawyer
Consult an employment attorney if:
- You are 40+ and the severance involves an ADEA release (OWBPA mistakes can invalidate the release)
- You suspect the layoff disproportionately targeted a protected class
- You recently engaged in protected activity (complaint, leave, accommodation request) before the layoff
- Severance is significant in amount
- Your equity, deferred comp, or commissions are materially affected
- Non-compete or non-solicit provisions are unusually broad
- You received WARN-eligible notice that was less than required
Timing matters. Unemployment claims, EEOC charges, and WARN claims all have deadlines (often 30-180 days). Acting in the first week preserves options that close fast.
Educational content only — not legal advice. Employment law varies by jurisdiction and situation. Consult a qualified employment attorney for advice specific to your circumstances.