Being Laid Off vs. Getting Fired

There are some key distinctions between being fired and laid off, and it's critical to understand them before deciding what to say to employers.

This is important because claiming you were laid off when you were fired for poor performance or policy violations can be risky. If the truth is discovered, employers will think you're untrustworthy and immediately dismiss your application.

And, if you were laid off, you have to explain that you weren't fired (which would be much more severe).

Fired and laid off are two distinct ways of losing your job. They affect your eligibility for unemployment benefits and how easily you can find a new job.

Your former employer should be very transparent about why they asked you to leave the company, so it should be easy to tell if you were laid off or fired. But, unfortunately, sometimes, it's not so easy to tell.

This article discusses what you need to know about the distinctions between being fired and being laid off and how to determine your options if you lose your job.

When an Employee Gets Fired

A worker can be fired for many reasons. However, unsatisfactory job performance is perhaps the most common reason for being fired.

Workers may also be fired for bullying their peers, insubordination, taking excessive time off, damaging or stealing company property, or failing to follow their employment contract's terms.

Therefore, it's essential to understand why you were fired and know how to discuss it with potential employers. If you lie, they may think you did the worst things possible to get fired.

A lot of states use an "at-will employment" principle:

At-will employment is a work contract in which the employee can leave the company at any time, and the employer can fire the worker if they want for any reason or at any time, as long as the dismissal isn't illegal.

Whenever there is no implied or explicit employment agreement stating otherwise, employment is assumed to be at-will in 49 U.S. states.

Only one state doesn't follow this law in the U.S. In Montana; employers must have reasonable cause to fire an employee who has completed their probationary period.

Just because you've signed a contract doesn't mean you're not an at-will employee - contracts will specify if you're employed at will. 

Unless you have a written document or oral statement from your employer stating otherwise, you are assumed to be employed at will.

When an employee is fired, they will most likely not be rehired. This permanent termination results from the employee's conduct, not the company's financial situation.

However, it would help if you stayed calm, whatever the reason that gets you fired. If you are concerned about such a possibility, you should consider how to best respond.

A good rule of thumb for any stressful event is to take a moment to pause, breathe, and think. Then, allow yourself to respond appropriately when you are not emotionally charged.

Some Reasons for Termination

These are some of the most common reasons why employees are fired from their jobs. Be sure not to do these things. Some, like misconduct and theft, are obvious, while others, like using company property for personal use, may not be so obvious.

1. Damaging the Company's Property

Accidents happen, but an accident involving company property could cost your job. Intentional destruction of company property will lead to termination. Be careful with items for communal and personal use alike.

2. Use or Possession of Drugs or Alcohol at Work

Showing up or working under the influence is never a good look, not to mention the safety risks, and simple possession of some drugs may also be illegal.

In the U.S., be mindful of federal, state, and local laws around possession. Some states allow employers to test all employees, while others require cause to test a specific employee. 

3. Forging Company Records

This is unethical and often illegal, and in some cases, it could also lead to jail time for involved employees.

4. Lying on Job Applications

Lying on your application has significant consequences; even if the lie were minor, the fact that you lied would be sufficient.

In extreme cases, for example, if you claimed to have a qualification or experience critical to your employment, you could be charged with fraud. 

In all cases, lying on your application will result in your dismissal.

5. Insubordination

You are not obligated to agree to every request or with your manager. However, if you refuse to obey orders, are obstinate, or get in your team's way, you probably won't last long.

When you have problems with your manager's requests or policies, politely express your displeasure or communicate directly with the company's Human Resources department.

6. Misconduct

This category includes everything from physical violence to verbal bullying to criminal actions.

This category also includes other items such as stealing and more dramatic cases like industrial espionage.

7. Conflicts of Interest:

Employees can be affected by a conflict of interest in various ways.

A conflict of interest occurs when someone is expected to exercise judgment on behalf of someone else (e.g., as an employee or professional), and the individual has some "other" interest (e.g., a personal financial interest) that could influence that judgment.

For example, if a woman is on a hiring committee looking for a new accountant and discovers that her sister is one of the candidates or the manager has a personal relationship with the employee.

8. Unsatisfactory Performance

Companies want employees who do their jobs well. If you consistently do not perform the duties outlined in your job description and contract or have gotten performance warnings, your job may be in danger.

Some employers may try to train you further or develop an improvement plan and give you a grace period before outright firing you.

Likewise, if your work requires excessive oversight or is frequently re-done, you are not a good fit.

9. Stealing:

It is not only illegal, but it is also a punishable offense. So you might imagine stealing cash, expensive things, or equipment like a work phone from the company.

While you're not wrong, you also have to be careful not to take small items - this is "petty theft" (such as stealing a stapler).

10. Use of Company Property for Personal Purposes

Unlike theft, employers will tolerate minor infractions like printing a W2 for personal use. However, using your computer to update Facebook or work a second remote job won't fly.

11. Absenteeism:

Employers will notice if you are constantly late, take many sick days, or exceed your vacation time. If you have a severe issue, discussing it with your employer rather than just not showing up is best.

Your absence may interfere with the team's ability to complete its work and unduly burden other coworkers.

12. Breach of Company Policy

When you're hired, policies differ from one company to the next, so it's important to carefully review your company's policies, code of ethics, etc.

Some companies, for example, may have policies regarding fraternization, conduct at company events, and much more. Learn and follow these guidelines.

Is it More Difficult to Find Another Job after Being Terminated?

Maybe you're reading this article because you were fired. However, you're likely feeling scared and upset regardless of why you were fired.

You might think that you will never find another job. But everyone makes mistakes, and employers know that.

Many people are fired, and depending on why they were fired, it may not impact their ability to find a new job.

Don't be upset or undervalue yourself; list your skills and accomplishments and ask your friends to help you brainstorm new opportunities. Then, continue to push yourself to take further steps and develop yourself.

There are exceptions, such as employees fired repeatedly or fired in certain circumstances (e.g., harassment, theft, etc.).

Depending on the reason for your termination, your confidence and sense of self-worth may diminish.

If you were fired for poor job performance and thought you were good enough, you might start to doubt your abilities and education.

However, failing to meet the performance expectations of one company doesn't mean you're not a fit for any company in your industry.

If you have savings, you can take the time to advance your skills and learn new software while looking for work.

If you're in business, Wall Street Oasis offers live public boot camps, corporate training, and online self-study courses. There are various online resources for other fields - you need to look them up.

If you were fired for something entirely within your control, reflect on what you should have done to avoid being terminated and what contributed to that issue.

For example, perhaps you tended to be quite late every Monday morning. Did you get home and go to sleep at a reasonable time Sunday night? But, on the other hand, did you wake up late, rush to get ready, and always miss the bus?

In any case, before you make changes to your resume and prepare to job hunt, go over the areas where you might need to improve.

This is important for your success because interviewers might ask about your firing and what you've done since.

When an Employee Is Laid off

When an employee is let go, it usually has nothing to do with his or her performance. For example, layoffs occur when a company restructures (possibly as part of a merger and acquisition), downsizes for financial reasons, or goes bankrupt.

The employee gets severance pay under certain circumstances such as layoffs, impending retirement, premature retirement, or any employee provided by their employer.

Employees might receive other types of benefits like stock options, if any, any remaining salary for the month, or additional payment based on months of service.

Employees who are laid off are generally entitled to unemployment benefits. However, inS., these can vary by state - learn more here.

Unlike being fired, layoffs can be temporary, and the firm may rehire laid-off employees when the economy improves.

Layoffs can occur for the following reasons:

• Downsizing
• Technological Advancements
• Outsourcing/Offshoring
• Reorganization
• Acquisition or merger
• Changing business needs

Some job tasks may live on and be distributed among other employees, but not enough of a workload to justify a role's continued existence and to employ someone for that role.

Rather than being laid off, employees may be "furloughed." Furloughed employees are expected to return to work when the furlough ends.

For example, when budget negotiations stall and the U.S. government shuts down, the government furloughs its workers.

During the furlough, the employee may be able to keep their health insurance and receive unemployment benefits.

Worker's Rights When Laid Off or Furloughed 

Your employer may offer a severance package when you're laid off. Speak with your human resources department about any severance pay and continuing benefits and when you'll receive your final paycheck.

If you have signed a contract with your employer, thoroughly review it, especially any sections about reasons for being laid off and severance benefits.

If you belong to a union, you may have additional rights. Speak with your marriage to learn about your specific requests in these situations.

If your employer has furloughed you and asks you to work during your leave, they must pay you for your time by law. This is why many companies restrict furloughed employees' access to company accounts.

You are also allowed to look for a new job while furloughed.

You can find additional information about your rights on the Department of Labor's Website. Be sure also to look up your state's department of labor.

In the U.S., employers in many states have the right to terminate your employment contract anytime. Nonetheless, works have certain rights:

Layoff notice: The Worker Adjustment and Retraining Notification Act (WARN Act) requires employers with more than 100 employees to provide notice of a mass layoff 60 days in advance.

Some states also have laws mandating advance notice or have expanded on the WARN Act. For example, employers with over 75 employees in California have to issue a warning for plant closures, mass layoffs, and relocations.

Continued healthcare coverage: The Consolidated Omnibus Budget Reconciliation Act (COBRA) lets qualified employees keep their health insurance plans when they lose their job - sometimes even if it was their choice.

Employees typically pay the entire insurance premium, up to 102% of the plan's cost. COBRA may also offer coverage in the event of divorce, death, reduction of hours, and even job changes, etc. 

Unemployment Compensation: Employers contribute to unemployment insurance programs. Employees laid off for a covered reason are entitled to unemployment benefits, which are significantly lower than their salary and capped.

You are not eligible if you quit. It usually lasts about six months but has been extended during crises. The programs are mandated by the federal government but are managed by each state. Some companies will provide severance pay, while others will not.

In most cases, state coverage begins after the severance has expired.

Benefits can be obtained for a variety of reasons. In some states, being fired for incompetence is covered, but not for misconduct. Benefit levels may also differ.

In the event of a severe recession, coverage may be extended. 

Employment Contracts and Collective Bargaining Agreements

If you were hired with an employment contract, such as a collective bargaining agreement (sometimes known as a cooperative employment agreement) negotiated by a union, the terms of your contract may include severance pay.

A collective bargaining agreement (CBA) is a formal written contract between an employer and the employees' union.

It results from extensive negotiation between the two on critical aspects of employment such as wages, overtime, worker safety, etc.

In the U.S., a CBA can cover three types of subjects: mandatory, voluntary, permissive, and illegal matters.

Mandatory topics are those mandated by law and the National Labor Relations Board. Some mandatory issues include:

• Wages, bonuses, and severance pay
• Overtime, holidays, vacation, and meals
• Grievance procedures, safety, work practices, and work-related injuries.              
• Discharge, layoffs, and job security.

Volunteer subjects, which include internal union matters and the nature of the business or industry, may be managed to negotiate but are not required.

This category includes all subjects unrelated to hours, pay, and working conditions.

Illegal subjects would violate the law and cannot be negotiated. This includes closed shops (when an employer only hires union members), unlawful discrimination against a protected class, and hot cargo clauses.

Once a CBA is reached, the employer and the union must abide. 

How to Write a Resume

Before you begin your job search, reassess your job skills to ensure that you find the job best suited to your abilities, and be sure to add any new experience or relevant projects to your resume.

If you want to change industries, some job posting sites have great options for helping you find jobs based on transferable skills, like LinkedIn Career Explorer. It'll even tell you what skills to develop for a particular career.

The One-Stop Career Centers funded by the U.S. Department of Labor and state unemployment offices are excellent resources for free job counseling. 

Wall Street Oasis' career services can help you perfect your resume, find a mentor, and find elite opportunities in the finance world.

Writing a resume or attending an interview after being fired or laid off can seem daunting. Some of our advice for you includes:

A. If you were fired:

• Only explain significant gaps: large gaps are worse than being fired, so it's critical to explain what you did during that time.
• If you get fired, still list the job and present your responsibilities well to convince the recruiters of your potential.
• You need to tell a story and explain why you got asked about the reason for your firing.
• American firms can't give a specific reason/denigrating opinion without cause. 
  • You can speak to your former supervisor to discuss and negotiate the reason and make a mutual decision.
  • Under a non-disparagement clause, they won't speak ill of you if you don't speak poorly of them.

B. If you were laid-off:

• Don't focus on layoff in the resume; you could present your interests and the skills you learned in that role that adds value to your resume.
• When you get an interview, if there's a good reason for your being laid off (e.g., the firm went bankrupt), discuss it so the interviewers understand you were not fired.

Last but not least:

You can use this time well regardless of your current employment situation. Use free online courses to hone your skills for your next position and update your job searches materials such as your resume, cover letter, and LinkedIn profile.

You may also find it beneficial to review your professional branding. Then, as the economy improves, you'll be ready to make your next career move.

Researched and authored by Ranad Rashwan | LinkedIn

Reviewed and Edited by Sara De Meyer | LinkedIn

Free Resources

To continue learning and advancing your career, check out these additional helpful WSO resources:

• Fired
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