By Ty Hyderally, Esq. and Faatimah Jafiq
March 27, 2025
In the last few months, employees all across America have been losing their jobs at an unprecedented rate. Losing your job can be overwhelming, but understanding your rights and benefits can help you regain a sense of control. If you have been terminated, here is what you need to know about severance pay, unemployment benefits, and key state laws.
Although severance pay is not automatically required by New Jersey law, you may be entitled to severance pay if it is guaranteed to you in an Offer Letter, an Employment Contract, or in a Company Handbook or Policy. If you are presented with severance pay, it is often in the form of a Severance Agreement and General Release or a Settlement Agreement or some other such document. You want to be careful when navigating these documents. Often it is best to consult with qualified attorney who concentrates in Employment law early in the process as you generally have only 21 or 45 days to review the document.
An attorney who concentrates in Employment law can go through the document and guide you with regard to the implications of the document and discuss leverage points to discussed enhanced monetary compensation. Additionally, he/she can discuss common terms in these agreements such as Non-Disparagement language, No rehire language, Confidentiality language, mutuality, Breach language, the handling of confidential information/company property, etc. Further, you want to be very careful about the inclusion of any post-employment restraints such as anti-poaching language, anti-solicitation language, and non-compete language. This can have long-term consequences with regard to your ability to be hired elsewhere.
You should be aware that normally the receipt of severance pay does not disqualify you from receiving unemployment benefits in New Jersey. These benefits can provide crucial financial support while you search for new employment. You should definitely keep proof of your efforts to look for work as the state’s Department of Labor and Workforce Development may require such documentation.
Health insurance is another critical concern. Under COBRA, terminated employees have the right to continue their employer-sponsored health coverage, although you may be responsible for the full premium. Be sure to review the deadlines and costs associated with COBRA coverage. Generally, the company has to give you COBRA notification after your termination in a timely manner, via some method where they can prove that you received notification. You then have 60 days to elect benefits. If you elect benefits, they are retroactive to the date of termination so there is no gap in coverage. Just FYI, if you waited for day 60 to elect, as many do, you would have to pay two (2) months of premium payments, so plan accordingly as COBRA can be pricey.
New Jersey employees are also protected by laws like the Wage Payment Act[1], Wage and Hour Law[2], Wage Theft Act, and the NJ Mini-WARN Act[3]. For instance, the Wage Theft Act ensures timely payment of owed wages, while the NJ Mini-WARN Act requires certain employers to provide notice and severance to employees affected by mass layoffs.
Additionally, your employer cannot engage in defamation of you post-termination. If you believe this is occurring, you may want to consult with an attorney who concentrates in Employment law. Try to keep records of the purported defamation such as screen shots of social media postings, text messages, emails, etc.
Remember, you have rights even after termination. Take the time to understand your options, advocate for yourself, and seek professional guidance to navigate this challenging time. A little preparation can go a long way in securing your financial future.
En nuestra firma hablamos español. This blog is for informational purposes only. It does not constitute legal advice and may not reasonably be relied upon as such. If you face a legal issue, you should consult a qualified attorney for independent legal advice regarding your particular set of facts. This blog may constitute attorney advertising. This blog is not intended to communicate with anyone in a state or other jurisdiction where such a blog may fail to comply with all laws and ethical rules of that state or jurisdiction.
[1] NJ Wage Payment Act: https://www.nj.gov/labor/wageandhour/tools-resources/laws/
[2] NJ Wage and Hour Law: https://www.nj.gov/labor/wageandhour/
[3] NJ Mini-WARN Act: https://www.nj.gov/labor/employer-services/warn/