Tuesday, February 17, 2009

Do you have a Layoff Action Plan?

An article in The Wall Street Journal today reports that employment law specialist Garry Mathiason of Little Mendelson (a firm that handles approximately half of the layoffs in the US) estimates that the "US could lose around three million jobs from January through March".

With that in mind, it's a good time to create a Layoff Action Plan. I didn't see my layoff coming until the morning of the event, so it's wise to be prepared. It's also helpful because while compiling your plan you'll face your fears head on.

You might find that you're more prepared than you think. We managed to reduce our spending and actually save some of my severance. Here are some items to consider:

: Okay, not brain surgery here. You'll need money if you're laid off. Do you have 3-6 months salary saved up? Do you know the amount of the check you would receive from unemployment? Do you know what your company's severance policy is (check your company handbook)?

: Once you've established how much money you'll have while unemployed, it's time to examine your expenses. What's the bare minimum you'll need to get by (rent/mortgage/utilities, car payments, food)? What could you live without temporarily (cable, video rentals, gym membership, take out, maid service)? Do you have student loans? If so, does your loan offer an option to defer or reduce payment while unemployed?

Health Insurance
: As someone who currently manages benefits, I can tell you health insurance is expensive. If you had to pay COBRA, what would it cost you? Remember, you're going to have to pay your contribution plus the contribution your company paid for you while you were employed. It could be anywhere from $150 to $1000 depending on the level of coverage and who's on your plan. A spouse and/or family dramatically raises your rates. Could you join your spouse's plan if you needed to?

Childcare: How flexible is your childcare center? If you wanted to reduce the days your child attends do you know the daily rate (this is often higher than the week rate)? How long would they hold your child's full time spot if you had to temporarily go to part time?

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