First 48 Hours After a Layoff Notice in California | McLellan Law
The First 48 Hours After a Layoff in California: Your Complete Action Plan
You were just laid off. Here's what to do in the next 48 hours — in order of importance. The choices you make now affect your financial recovery, your legal rights, and your future employment. Don't let shock lead to costly mistakes.
Hour 1: Secure Your Documents and Evidence
Before your access is cut off — which often happens immediately — make sure you have:
- A copy of your offer letter and any employment agreements or equity grant documents
- Your most recent pay stubs (showing salary, bonus, and equity compensation)
- Any written performance reviews — especially recent ones that were positive
- The written layoff notice or WARN Act notice, if you received one
- The severance agreement and release of claims — do not sign yet; do keep it
- Any emails or documentation of complaints you made before the layoff
If you had company-issued equipment, note what you had and what you are returning. Get a receipt if possible.
Hour 2: Confirm Your Final Pay and Accrued PTO
California law is very specific about final pay. Under Labor Code §§ 201 and 203:
- If you were discharged (involuntary termination or layoff), your employer must pay all wages — including accrued vacation — immediately at the time of termination
- If your employer fails to pay final wages on time, you may be entitled to "waiting time penalties" — one day of wages for each day of delay, up to 30 days
Confirm that your final paycheck (or direct deposit) includes: your final regular wages, all accrued but unused vacation or PTO (California does not allow "use it or lose it" PTO policies — accrued PTO is wages), any earned commissions or bonuses that have vested.
Unpaid Wages: If your final paycheck is short, or if you believe wages were withheld improperly, this is a separate potential claim. Document the discrepancy and consult an employment attorney.
Hour 3: Do Not Sign the Severance Agreement Yet
Your employer wants you to sign quickly. You don't have to. The law gives you time:
- If you are 40 or older: federal law requires at least 21 days to consider the agreement, and 7 days to revoke after signing
- In a group layoff of multiple employees over 40: 45 days to consider
- California law does not impose a minimum review period for employees under 40, but most agreements include a reasonable review period
Use that time. Have an employment attorney review the agreement before you sign. A release of claims given in exchange for severance can bar you from suing for wrongful termination, discrimination, or retaliation — but only if it is valid and you knowingly waived those rights.
Day 1: File for Unemployment Insurance
Go to the California EDD website (edd.ca.gov) and file your Unemployment Insurance claim. File the same day or the next day — do not wait. There is a one-week unpaid waiting period, and the clock does not start until you file.
Filing for unemployment does not affect your ability to also pursue legal claims for wrongful termination. The two processes are independent.
Day 1: Understand Your COBRA and Health Insurance Options
Your employer-sponsored health insurance coverage continues through the end of the month of termination in most plans. After that, you have three primary options:
- COBRA — continue your exact plan; you pay full premium + 2% admin fee; up to 18 months for most qualifying events
- Cal-COBRA — if your employer has 2–19 employees; up to 36 months of coverage
- Covered California marketplace — a job loss is a qualifying event for special enrollment; marketplace plans with income-based premium tax credits may be less expensive than COBRA
You have 60 days from the loss of coverage to elect COBRA or enroll in a marketplace plan. Compare costs before deciding.
Day 1–2: Assess Whether the Layoff Was Lawful
Not every layoff is simply a business decision. Consider whether any of these apply:
- You are over 40 and younger colleagues in your department were retained
- You had recently complained about discrimination, harassment, or illegal conduct
- You were on or had recently returned from protected leave (FMLA, California PDL, baby bonding leave)
- The layoff occurred shortly before a significant vesting event, bonus, or commission payment
- The selection process for layoffs was not applied consistently or transparently
- You belong to a protected class and employees outside that class were disproportionately spared
If any of these apply, consult an employment attorney before signing any release of claims.
Day 2: WARN Act — Were You Entitled to Notice?
If your employer laid off 50 or more employees at a single location within a 30-day period — or if the company employed 100 or more workers — California's WARN Act (Lab. Code § 1400 et seq.) may have required 60 days advance written notice. If you did not receive 60 days' notice and the WARN Act applies, you may be entitled to 60 days of pay and benefits as damages.
WARN Act Tip: California's WARN Act is broader than the federal WARN Act — it covers employers with 75 or more employees and layoffs of 50 or more in a rolling 12-month period. If you were part of a mass layoff at a tech company, WARN Act compliance is worth checking.
Day 2: Negotiate — Or At Least Understand What You're Being Offered
Severance packages are often negotiable. Standard packages may include one to two weeks of pay per year of service, but there is no legal minimum in California. Enhanced severance — more weeks, extended benefits, accelerated vesting — can often be obtained, particularly when:
- There is potential legal exposure for the employer (discrimination, retaliation, WARN Act)
- You have long tenure or high compensation that creates high litigation risk for the employer
- The employer wants a clean, mutual release quickly
An employment attorney can evaluate whether you are leaving money on the table and advise on negotiation strategy.
Frequently Asked Questions
My employer said the severance offer expires in 72 hours. Is that true?
If you are over 40, federal law gives you a minimum of 21 days to consider an agreement waiving ADEA claims. Any attempt to shorten that period for employees over 40 makes the waiver potentially unenforceable. If you are under 40, your employer can set a shorter deadline, but you still have the right to consult an attorney before the deadline expires.
Do I have to return the signing bonus I received if I was laid off?
It depends on your agreement. Some signing bonus agreements require repayment if you leave within a specified period, but California law limits enforcement of such provisions — particularly if you were involuntarily terminated. This is a specific question for an employment attorney.
What happens to my unvested equity after a layoff?
This depends entirely on your equity plan and grant agreement. Many plans provide for accelerated vesting in a change of control event but not in a regular layoff. However, if you were laid off shortly before a significant vesting date, the timing may be relevant to whether the layoff was retaliatory. Review your grant documents carefully.
Can my former employer prevent me from getting unemployment insurance?
Employers can contest unemployment claims, but for a standard layoff (not termination for misconduct), you are almost always entitled to benefits. An employer contesting your claim must show you were terminated for "misconduct" as defined by California EDD regulations — a standard that is higher than simply poor performance.
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Schedule a Free Consultation (408) 963-7533About the Authors
Claire Melehani, Esq.
Employment law attorney at McLellan Law Group with extensive experience representing employees in wrongful termination, discrimination, and retaliation matters throughout Silicon Valley.
Steven McLellan, Esq.
Founding attorney at McLellan Law Group, specializing in employment law and business litigation throughout Silicon Valley and Santa Clara County.
Legal Disclaimer: This article is for general informational purposes only and does not constitute legal advice or create an attorney-client relationship. Employment law is complex and fact-specific; outcomes vary depending on individual circumstances. Consult a licensed California employment attorney for advice specific to your situation. McLellan Law Group, LLP · 20665 4th Street, Ste. 202, Saratoga, CA 95070 · (408) 963-7533
