What You Need to Know About Getting Laid Off as an Older Worker

As the possibility of recession looms, layoffs are once again making headlines. Current layoffs are driven by shifts in demand caused by the ending of pandemic restrictions and anti-inflationary measures, including increases in interest rates. Regardless of the underlying causes, getting laid off is a traumatic experience, and getting laid off as an older worker can be particularly daunting.

When you’re laid off as an older worker, there are more barriers to reemployment, and research shows that most workers will take a reduction in pay. ProPublica surveyed 20,000 workers over 50 and found 56% experienced layoffs or were forced to leave their jobs. Even more concerning, they found that only 10% of the workers laid off ever reached the same salary again.

If you find yourself laid off as an older worker and are wondering what to do next, below are some things you need to know:

1. Know Your Rights After Being Laid Off as an Older Worker

If you have been laid off as an older worker, it’s important to know your rights. Employees over the age of 40 are protected by the Age Discrimination in Employment Act of 1967, or ADEA. The ADEA prohibits discrimination in hiring, promotion, and compensation practices, among others. Most importantly for laid off workers, this law protects against discharge, or layoff, based on age.

How do you know if a layoff has disproportionately impacted employees over 40? You consult the chart provided when you were notified of your layoff and offer of severance. This chart is required by law and contains information about how many people were laid off, as well as their ages and positions. An analysis of this information can identify bias.

In addition, the ADEA also protects older workers from involuntary retirement. For example, employees cannot be forced to leave employment at a certain age, aside from a few exceptions. Involuntary retirement also applies if employees are faced with a choice between retiring or being terminated or are fired after refusing to retire.

If you feel that you are the victim of age discrimination in the workplace, you may wish to consult a reputable employment attorney to see if discrimination has taken place and explore your options in response. Be sure to do this before you sign any severance or retirement agreements.

2. Financial Implications of Being Laid Off as an Older Worker

Money usually tops the list of concerns when you’re laid off as an older worker. Before you panic, take stock of your current situation and explore your options. Below are a few areas to consider:

Severance/Early Retirement/Exit Package

While there is no legal requirement for employers to provide a severance package, many organizations will offer one, especially for more senior level employees. If you are fortunate enough to receive a package, it can consist of a variety of incentives, including pay, extension of benefits, and assistance finding a new job. Severance packages can get complicated, and sometimes they are negotiable. So, if you have any questions, it’s a good idea to seek legal counsel.

Vacation Pay

If you don’t know it, research your company’s policy, or find the provision in your employment contract regarding payment of unused paid time off. If there is no provision, or you are not satisfied with the current policy, you may have legal recourse at the state level. While there is no federal regulation, there are a number of states that require payout of unused vacation following a layoff.

401k

Your contributions to your 401k are yours. Your employer’s contributions to your 401k are also yours, unless the company requires that you are employed a certain amount of time before their contributions are vested. If their contributions are not vested when you are laid off as an older worker, you can try to negotiate inclusion as part of your severance package.

Regardless, you will want to roll-over your investments into another investment vehicle. Check with your employer regarding any deadlines. In addition, if you are laid off in your 60s, you can withdraw funds from your IRA or 401k without penalty. So, if you need funds now to pay the bills, this can be a good option.

Savings/Unemployment Insurance

Assess your savings situation and apply for unemployment insurance. Combined with any severance pay and access to 401k funds, these are the financial resources that will determine how flexible your situation is regarding financial security. A comfortable amount of time to allow for a job search is six months to a year.

Social Security

If you find yourself short on savings and are over 62 years old, applying for social security might be your best option. You can receive social security and still collect unemployment benefits as well, although your benefits may be reduced. However, it’s important to note that if you start receiving social security before full retirement age, your benefit payments will be reduced for life. So, while it’s an option, it’s better to wait if possible.

Financial Assistance

While it’s wonderful if you get a severance package, have savings, a nice 401k balance, and the option to get social security, many people laid off as an older worker do not have these luxuries. If you were living month to month before, a lay off can be devastating. In this instance, be sure to reach out for federal, state, and local resources that may be at your disposal. These can include everything from food assistance to help finding affordable housing and employment counseling.

3. Should I Work, or Should I Retire?

Plans change. Dreams change too. Although a layoff is not part of your life plan, it is a good time to reexamine whether the plans you made still apply. Maybe getting laid off is a blessing in disguise allowing you to move in a different direction. Maybe you want to travel, take on new challenges as a volunteer, or learn a new hobby. While not everyone will have the resources or the wish to retire after a layoff, for those who do, it is the beginning of a whole new chapter of life.

4. How to Find Work After Being Laid Off as an Older Worker

While it can be more challenging to find a job when an older worker, below are a variety of strategies that can help you find fulfilling, lucrative employment:

Update Your Career Documents

Before beginning a new job search, update or create a resume and LinkedIn profile. Make sure that it follows a modern format that is optimized for online submission. It’s also important to remove any obvious cues as to your age. For example, don’t list dates or include details for experience over 10 to 15 years and remove dates from any education over seven years old. Also, highlight your technical skills and abilities to demonstrate you have kept up with advances in technology.

Engage Your Network

You don’t get to be an older worker without making a few professional contacts along the way. Now is the time to mobilize these contacts to help you find another position. Reach out and let them know that you are looking for a position. Ask them for any job leads or contacts they may have that could lead to employment opportunities.

Target In-Demand Jobs

If opportunity is limited in your field, explore other options where job growth is high. Look for jobs related to your experience first and focus on your transferable skills. If that doesn’t work, you may want to consider reskilling to support your career transition. Taking courses or completing a certificate program will demonstrate your commitment to staying in the workforce too.

Start Your Search Right Away and Stay Productive

The chances for finding a new job are best right after you leave your previous job. So, get started right away with your job search. In addition, undertake activities that will look good on your resume and serve to minimize an employment gap.  For example, start a course to brush up skills, or volunteer in a related field.

Consider Employment Alternatives

If you are still coming up empty, start thinking outside the box. Consider freelance and contract opportunities or start your own business. There are many ways to make a living besides traditional employment. You are only limited by your imagination.

While getting laid off as an older worker can be challenging, it can also be the start of something wonderful! Stay calm, weigh your options, and start forging a new, and better, path. Be sure to get a Virtual Vocations resume review and consult their hand-vetted database of remote jobs as you begin. This will turbo charge your job search and help you quickly land your next employment opportunity.

What practical ways helped you move forward after being laid off? Connect with Virtual Vocations on Facebook, Twitter, LinkedIn, Instagram, and YouTube to share your thoughts and tips. We’d love to hear from you!