Benefits For Fired Employees

Under federal and state laws, employers have certain legal obligations to the employees they fire with respect to continuing health coverage, unemployment insurance benefits, and vested retirement benefits. Apart from these benefits, employers generally have no legal obligation to provide severance payments or other benefits to the employees they fire. However, many employers provide severance payments or benefits as a matter of company policy or pursuant to a negotiated separation agreement with a fired employee.

Be careful in discussing with employees the benefits, if any, to which they may be entitled upon leaving your business. More than a few employers have been sued for benefits they didn't intend to provide on the basis of some well-meaning comment about benefits that might be available to terminated employees. Refrain from discussing benefits until you know for sure what your obligations will be under applicable law and any policies you adopt.

The following are the benefits that you may have the legal obligation to provide if you fire an employee: