Written by the Layoff HQ research team. Sources verified against DOL, EEOC, IRS, and state workforce agency primary documentation.

A layoff notice from Portillo's starts several time-sensitive clocks that most employees don't know about. On August 6, 2026, Portillo's announced it is eliminating 18% of its Oak Brook, Illinois headquarters staff, affecting corporate and administrative roles. The company has not disclosed severance terms publicly. What follows is a deadline-by-deadline guide to every decision you now face, ordered by how soon each one expires.

The most urgent actions right now:
  • File for Illinois unemployment at ides.illinois.gov today, benefits don't start retroactively.
  • Don't sign your severance agreement yet, you may have 45 days to review it under federal law.
  • You have 60 days to elect COBRA or find Marketplace coverage before your health insurance gap.
  • If you hold ISOs, you have 90 days from termination to exercise them and keep favorable tax treatment.
  • Don't take a 401(k) check, request a direct rollover to avoid a taxable distribution.

What happened

Portillo's, the Chicago-area restaurant chain, announced on August 6, 2026 that it is cutting approximately 18% of its Oak Brook headquarters workforce. The cuts affect corporate and administrative staff. The company has not publicly disclosed the specific number of employees affected or the terms of any severance package.

What should you do about unemployment, and how fast?

Unemployment insurance is a state-run benefit you paid into while working. It's not automatic. You have to apply, and you should do it today.

Illinois administers UI through the Illinois Department of Employment Security. File online at ides.illinois.gov. The state doesn't make your benefits retroactive to your last day if you wait, every day you delay is a day of potential benefits you don't get back.

Illinois caps weekly benefits at $595 per week (without dependent allowances) as of 2026.1 Your actual benefit is calculated based on your earnings history, so your amount may be lower depending on your wage base. Illinois does have a waiting week, meaning your first week of eligibility typically doesn't pay out, but you still need to certify it to keep your claim active.

Have these ready when you file: your Social Security number, your employment dates at Portillo's, your final salary or hourly wage, and your bank account information for direct deposit. Illinois also requires identity verification, so expect to submit a government-issued ID through the portal.

Once your claim is active, you certify weekly to continue receiving payments. Miss a week and you may need to reopen your claim. Set a recurring reminder now.

What should you do about your severance agreement?

Severance is not free money with no strings attached. In almost every case, a severance agreement asks you to waive your right to sue the company for claims arising out of your employment. That waiver has real value. Don't give it away without reading what you're signing.

If you're 40 or older, the Older Workers Benefit Protection Act gives you specific rights. Because Portillo's is laying off a group of employees, federal law requires the company to give workers 40 and older at least 45 days to review the agreement before signing.2 If you're under 40, or if you were the only person laid off, the minimum review window is 21 days.

You also have 7 days after signing to revoke the agreement, even if you've already cashed a check.2 The agreement legally can't become effective until that 7-day revocation window closes.

A few things to look for before you sign: whether the agreement includes a non-disparagement clause, whether it restricts your ability to work for competitors, whether it covers future claims, and whether the severance amount reflects your tenure and role. An employment attorney can review the agreement, and many offer free or flat-fee consultations for exactly this situation.

Portillo's has not disclosed its severance terms publicly, so read your specific offer carefully. Don't let anyone pressure you into signing before your review window expires.

What happens to your health insurance?

Your Portillo's health coverage ends when your employment ends, typically on your last day or the last day of the month in which you separate. After that, you have two main options: COBRA or the federal Marketplace.

COBRA lets you keep your exact current plan. You pay the full premium yourself, including the portion Portillo's was covering, plus a 2% administrative fee. The average COBRA premium for individual coverage runs about $703 per month as of 2026.3 Family coverage runs considerably higher. You have 60 days from your qualifying event date or the date your COBRA notice arrives (whichever is later) to elect coverage.4 The critical thing: COBRA is retroactive. If you get sick during that 60-day window and then elect COBRA, your coverage applies back to your separation date. You don't have to elect it on day one to be protected during the window.

The Marketplace (healthcare.gov) is often cheaper, especially if your income drops significantly after the layoff. Losing employer coverage is a qualifying life event that opens a 60-day Special Enrollment Period.5 You can shop plans and compare premiums side by side. If your projected annual income falls below a certain threshold, you may qualify for subsidies that bring your premium down substantially.

Run the numbers on both before the 60-day window closes. Going without coverage during the gap is a financial risk, not a cost-saving move.

What about your equity and stock options?

Portillo's is a publicly traded company, so if you received equity as part of your compensation, your termination triggers specific deadlines you can't ignore.

Incentive Stock Options (ISOs): You have 90 days from your termination date to exercise any vested ISOs and keep their favorable ISO tax treatment under IRC Section 422.6 After 90 days, they convert to non-qualified stock options, which are taxed as ordinary income at exercise rather than at the more favorable long-term capital gains rate. Check your option grant agreements to confirm your vested share count and your strike price before the clock runs out.

One caution on ISOs: exercising them can trigger Alternative Minimum Tax in the year of exercise, depending on the spread between your strike price and the fair market value of the stock. If you're sitting on a large spread, talk to a CPA before you exercise. The tax hit can be significant and isn't always visible until you file.

Restricted Stock Units (RSUs): Any unvested RSUs typically forfeit on your last day. Check your equity plan documents and any accelerated vesting provisions in your severance agreement. Some companies include partial acceleration as part of a separation package. If your agreement is silent on RSUs, assume unvested shares are gone.

Your vested RSUs that have already settled (shares you actually own) are yours. Those aren't affected by the layoff.

What about taxes on your severance?

Severance pay is ordinary income. It's taxed like a paycheck, not like a bonus in a different category. The IRS taxes supplemental wages, including severance, at a flat federal withholding rate of 22% on the first $1 million paid.7 That's the withholding rate, not necessarily your actual marginal rate. If your total income for 2026 puts you in a higher bracket, you'll owe the difference when you file.

This matters especially if your severance is paid in a lump sum. A large one-time payment may be underwithheld relative to your actual tax liability. The Q2 2026 estimated tax deadline already passed on June 15, 2026. The next IRS estimated tax deadline is September 15, 2026.8 If you received severance and think your withholding is short, consider making a Q3 estimated payment before that date to avoid a penalty.

Illinois also taxes severance as ordinary income at the state level. Factor the state income tax into your calculation alongside federal withholding.

What should you do with your 401(k)?

You have a few options when you leave, and the worst one is taking a direct cash distribution. Here's what each path looks like.

Leave it where it is: If your balance is over a plan minimum (typically $5,000), Portillo's is generally required to keep your account open. This is the do-nothing option. It's fine short-term but means another account to track.

Roll to an IRA: A direct rollover moves your balance directly from Portillo's plan to an IRA of your choice, with no taxes or penalties. This is usually the cleanest option and preserves your tax-deferred growth. Call the plan administrator and ask for a direct rollover, not a distribution check.

Roll to a new employer's plan: If you land a new job quickly, you may be able to roll your Portillo's balance into your new employer's 401(k). Check the new plan's rollover rules first.

The indirect rollover trap: If Portillo's sends you a check made out to you, they're required to withhold 20% for taxes. You then have 60 days to deposit the full original amount (including the withheld 20%, which you'd have to cover out of pocket) into a new retirement account to avoid it being treated as a taxable distribution.9 That 20% withholding becomes a tax credit when you file, but you have to come up with the cash in the meantime. The direct rollover avoids all of this. Always request a direct rollover.

Check your post-layoff checklist for a full breakdown of the 401(k) rollover steps and timing.

Deadlines and rules described here reflect federal law and general state guidelines as of the article date.

The Layoff Guide

The deadlines above apply whether or not you are tracking them. The Layoff Guide from Layoff HQ is a 33-page field guide that covers all twelve post-layoff deadline events in the order they arrive: unemployment, the severance review and revocation windows, COBRA and the Marketplace, your FSA, your equity window, your 401(k), and your taxes. Each event comes with timed checkpoints, the decision math, and the one mistake that costs people the most, plus a fill-in worksheet that turns your last day worked into your complete personal deadline calendar. One-time purchase. No subscription. Instant download, with a 14-day full refund if it is not useful.

Get The Layoff Guide, $39 or build your free Decision Calendar.

Sources

  1. Illinois Department of Employment Security. "Unemployment Insurance Eligibility." ides.illinois.gov. Maximum weekly benefit $595 (2026, without dependent allowances).
  2. U.S. Equal Employment Opportunity Commission. "Age Discrimination in Employment Act." eeoc.gov. OWBPA 45-day group review window; 7-day revocation period.
  3. Kaiser Family Foundation. "Health Policy 101: Employer-Sponsored Health Insurance." kff.org. Average individual COBRA premium approximately $703/month (2026).
  4. U.S. Department of Labor, Employee Benefits Security Administration. "COBRA Continuation Coverage." dol.gov. 60-day election window from qualifying event or notice date.
  5. HealthCare.gov. "Special Enrollment Period." healthcare.gov. Loss of employer coverage triggers 60-day SEP.
  6. Internal Revenue Service. "Publication 525, Taxable and Nontaxable Income." irs.gov. ISO post-termination exercise window: 90 days under IRC Section 422.
  7. Internal Revenue Service. "Publication 15 (Circular E), Employer's Tax Guide." irs.gov. Federal supplemental wage withholding rate: 22% on first $1 million.
  8. Internal Revenue Service. "When to Pay Estimated Tax." irs.gov. Q3 2026 estimated tax due September 15, 2026.
  9. Internal Revenue Service. "Rollover Chart." irs.gov. Indirect rollovers must be completed within 60 days to avoid taxable distribution treatment.