The Difference Between Getting Fired and Getting Laid Off

Young business woman made redundant
Peter Dazeley / Photographer's Choice / Getty Images

Being fired and being laid off are two distinct ways of leaving a position. Being fired vs. laid off can impact your eligibility for unemployment as well as your hiring prospects for the future. Therefore, it's a good idea to be very clear about the precise nature of your termination, should you lose your job.

If that sounds like it should be an easy distinction to make, you're right: ideally, your former employer would be very clear about the nature of your separation from the company.

But as we know, the real world is often far from perfect.

Here's what you need to know about the differences between being fired and being laid off, and how to know where you stand when you lose your job.

When an Employee Is Fired

An employee is fired when his personal performance is unsatisfactory, or if he does not comply with company standards. He might also be fired for damaging company property, embarrassing the organization publicly, or otherwise failing to adhere to the terms of his employment contract. Here are more common reasons employees get fired.

When an employee is fired, there is no expectation of being rehired at a future date.

When an Employee Is Laid Off

When an employee is laid off, it typically has nothing to do with the employee's personal performance. Layoffs occur when a company undergoes restructuring or downsizing, or goes out of business. In some cases, a layoff may be temporary, and the employee is rehired when the economy improves.

In some cases, laid off employees may be entitled to severance pay or other employee benefits provided by their employer.

Were You Laid Off, or Were You Fired?

The first thing you need to figure out, as a newly terminated employee, is how your former employer will characterize your separation from the company.

If you are an at-will employee – and workers in most states in the U.S. are – your employer is under no obligation to furnish you with a reason for your termination. But it's still appropriate for you to ask them how they'll refer to your termination when speaking to future employers and the state unemployment office.

Release of Claims

Typically, employers will ask laid-off employees to sign an employment separation agreement, sometimes (but not always) in return for a severance package. It's always a good idea to take time to read and consider the agreement before signing. Don't sign anything in the heat of the moment, directly after learning of your termination. In addition, it's often wise to consult an employment attorney.

Collecting Unemployment

To collect unemployment, you typically need to have lost your job "through no fault of your own." People who are laid off are likely to receive unemployment because they left due to restructuring rather than personal performance.

People who are fired are less likely to receive unemployment because they left due to issues with their personal performance.

However, if a fired employee can argue that their firing was unfounded or unrelated to performance, he may be eligible for unemployment.

If you are unsure whether or not you qualify for unemployment, check with your state unemployment office.

Have a Question?

Here are answers to the most frequently asked questions about termination from employment, including reasons for getting fired,employee rights when you have been terminated, collecting unemployment, wrongful terminationsaying goodbye to co-workers, and more.

Read More: 50+ Frequently Asked Questions About Getting Fired | Questions to Ask the Employer When You're Fired

Continue Reading...