What to Do in the First 72 Hours After a Layoff

This is the checklist, in priority order, of what to do before the third day ends.

Hour 0 to 24: Stabilize and Document

1. Save your employment records before access ends

Most employers cut system access within hours of notification. Before that happens, download and save:

• Offer letter and any amendments
• Most recent pay stubs (last 12 months)
• Performance reviews
• Equity grant documents (RSU, ISO, ESPP)
• Bonus terms and any unpaid commission records
• Health insurance ID cards and plan documents
• 401(k) statements with current balance

Email these to a personal address or save to a personal cloud account. Once access is cut, retrieving these records can take weeks of HR back-and-forth.

2. Review the severance offer carefully and do not sign

If your employer presents a severance agreement, you have time. Federal law requires specific waiting periods before you can sign away certain rights.

If you are 40 years old or older, the Older Workers Benefit Protection Act (OWBPA) requires:

• 21 days to consider the offer if you were laid off individually
• 45 days to consider the offer if you were part of a group layoff
• 7 days after signing to revoke

Source: U.S. Equal Employment Opportunity Commission (eeoc.gov)

Signing on the same day is rarely required and almost never wise. Use the full window. For a deeper explanation, see our guide to the OWBPA review window.

3. Understand your final paycheck rules

State law dictates when you must be paid your final wages. Some states require payment on the last day of work. Others allow up to the next regular payday.

For unused vacation pay, rules vary by state and by company policy. Some states require payout. Some do not.

Source: U.S. Department of Labor (dol.gov/agencies/whd/state)

Hour 24 to 48: Lock In Health Coverage

4. Note your COBRA election deadline

You have 60 days to elect COBRA continuation coverage from the date your employer-sponsored coverage ends. Coverage is retroactive to the day your prior coverage ended, even if you wait the full 60 days to enroll.

Source: U.S. Department of Labor, COBRA Continuation Coverage (dol.gov/agencies/ebsa/laws-and-regulations/laws/cobra)

5. Compare COBRA against the Marketplace

COBRA premiums are typically 102% of the full premium your employer was paying. This is often $600 to $2,000 per month for an individual plan, depending on your plan and family size.

Marketplace coverage purchased through HealthCare.gov may be substantially cheaper, especially if your reduced income now qualifies you for premium tax credits. Job loss is a Special Enrollment Period that gives you 60 days to enroll on the Marketplace.

Source: HealthCare.gov

You do not have to decide immediately, but you should know both numbers within 48 hours. For a full comparison framework, see our COBRA vs. Marketplace cost guide.

Hour 48 to 72: File Claims and Plan Cash

6. File for unemployment insurance immediately

Unemployment benefits are not retroactive in most states. The week you file is the first week you can receive benefits, even if you were laid off two weeks earlier.

File online through your state workforce agency. Most states require:

• Your last day worked
• Reason for separation (layoff, not termination for cause)
• Last employer's address and federal employer ID
• Your earnings for the past 12 to 18 months

Source: U.S. Department of Labor, Unemployment Insurance (dol.gov/general/topic/unemployment-insurance)

7. Calculate your runway, not your savings

Runway is the number of months you can pay essential expenses with available cash, including severance, savings, and unemployment income. Savings alone is misleading because it ignores incoming severance and benefits and excludes recurring expenses.

Total monthly essentials: rent or mortgage, utilities, insurance, food, minimum debt service.

Total available cash: severance + savings + projected unemployment for 6 months + spouse income.

Runway in months: total available cash divided by total monthly essentials.

Most people are surprised by how short their runway is. The median runway for a household with one income earner laid off is 3 to 5 months.

8. Know your equity exercise window

If you received Incentive Stock Options (ISOs) or Non-Qualified Stock Options (NQSOs), you typically have 90 days from your last day worked to exercise vested options. Miss the window and the options expire worthless.

For Restricted Stock Units (RSUs), already-vested shares are yours. Unvested RSUs that would have vested after your last day are usually forfeited.

For accelerated vesting provisions in your equity grant or severance, read the documents carefully. Some grants accelerate on involuntary termination.

Source: Internal Revenue Service Publication 525 (irs.gov)

For the full equity decision framework, see our RSU and ISO guide.

9. Note your Q2 estimated tax deadline

If your severance is paid as a lump sum and federal withholding is applied at the supplemental rate of 22%, you may owe additional tax. The Q2 estimated tax payment deadline is June 16 for the previous quarter.

If your severance is paid as continued salary, withholding generally tracks regular wages and additional payments are less common.

Source: Internal Revenue Service Publication 505 (irs.gov)

After 72 Hours: Build a System

The first 72 hours are about not missing the immediate deadlines. The next 6 to 12 months are about not missing the dozens that follow.