15 Things You Should Do if You Are Laid Off or Furloughed

Millions of Americans who had steady jobs just a few months ago are now out of work for the foreseeable future due to the COVID-19 pandemic. Some are only furloughed, which means they'll likely go back to work once the stay-at-home orders are lifted, while others are laid off, which means it's time to search for new employment.

Either situation can be stressful in the current climate, but you can make things a little easier on yourself by taking a few proactive steps now. Here are 15 things you should consider doing if you've been laid off or furloughed.

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The federal government has expanded and extended unemployment benefits to help those affected by COVID-19. You can now claim benefits for an additional 13 weeks in most states and you'll get an extra $600 per week on top of your regular state benefit. Self-employed workers and individuals who quit their jobs due to COVID-19 concerns are now eligible for benefits as well.

Though most states have waived their waiting periods, it still takes a little while to process your application. Apply as soon as you are laid off or furloughed so you can get your checks as quickly as possible. Visit your state's unemployment website to learn how to apply.

ALSO READ: The Hidden Cost of Unemployment: Losing Health Insurance

You may not be working during the pandemic, but you should still keep in touch with your employer if you're furloughed to learn about any changes. Your furlough may be shortened or lengthened depending on changes to your state's stay-at-home order, or that furlough could turn into a layoff if your company is unable to keep its doors open due to the extended lack of income.

Check in with your employer periodically to see if anything's changed so you can make plans for your next steps.

Check with your company's HR department to see if it will pay you for accrued sick and vacation days if you're laid off. This can give you a little extra cash to help you get by until you find a new job. If your company does offer compensation for accrued paid time off, inquire about when you can expect these funds.

Employers aren't legally required to pay you for unused sick and vacation days in all cases, but check your employee handbook or other documentation you signed when you first got the job. In some states, if your employer doesn't have a written policy stating that you forfeit your paid time off if you're fired or laid off, they are required to pay you for those days.

Some companies may give laid-off employees a severance to help them cover their expenses until they find a new source of income. Talk to your company's HR department to see if it is offering any severance and if so, when you can expect this money so you can be prepared.

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If you're being laid off, it doesn't hurt to get a reference letter from your employer stating that you were laid off due to the COVID-19 pandemic and not let go due to any fault of your own. This will give new employers more confidence in hiring you and it might give you an edge over other newly-unemployed candidates who are competing for the same jobs.

ALSO READ: These Are the Workers Most At Risk of Being Laid Off. How to Prepare if You're One of Them

Furloughed employees will typically retain their normal health insurance coverage, but laid-off employees won't qualify for employer-subsidized health insurance anymore. You are able to continue with your current health insurance for up to 18 months under COBRA, but you are responsible for paying the full cost of the insurance, plus an administrative fee, so it may not be your most affordable option.

Skipping health insurance altogether usually isn't smart either because if you have a medical emergency, you'll have to pay for the full cost on your own and that could create long-term financial problems. Get quotes from a few different insurers and compare their premiums, deductibles, and coverage to determine which offers the best value for you.

If you're expecting a tax refund and you haven't filed your 2019 taxes yet, you should do so as soon as possible. It'll give you another source of income to rely upon over the coming weeks.

Those who aren't required to file taxes because their incomes didn't exceed the standard deduction for their tax filing status should file a return anyway. If you qualify for refundable tax credits, you could get some money back. You can also file tax returns for previous years and claim refunds for them as well if you weren't required to file a return. However, you must file your return within three years or else the U.S. Treasury gets your refund instead.

Once you've completed all of the previously-mentioned steps, you should have a good idea of how much money you can expect over the coming weeks. Make a list of all of your expenses and remove unnecessary expenses, like unused subscriptions. Then, do your best to balance things out.

You may have to put some of your savings goals on hold for the time being, like saving for retirement or for a home down payment. Focus on taking care of your bills first and then if you have any money left over, you can decide how to put it to use. Building or padding your emergency fund is a smart place to start.

If you cannot find a way to get by on the money you have, you should start looking for ways to lower your expenses. Banks, credit card issuers, service providers, and some landlords are offering hardship assistance programs to those unable to pay their bills because of the COVID-19 pandemic. Reach out to some of these companies to see what type of assistance they can offer you.

These programs usually enable you to defer payments for one or more months without hurting your credit or incurring late fees, but your balance will continue to accrue interest. Pay attention to any correspondence you receive from these companies after you've enrolled in their hardship assistance programs so you know about any changes and when you need to start making payments again.

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Whether you're laid off or furloughed, a part-time job can help you make ends meet until you're able to return to your regular job or find a new one. Grocery stores, food delivery services, and cleaning services are hiring right now to keep up with increased demand. You may also be able to do some work from home, like watching a neighbor's pet or child if they still have to go to work.

Finding new employment could affect your eligibility for unemployment benefits, so weigh this carefully before deciding whether a part-time job is the right move for you right now.

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The CARES Act lifts restrictions on retirement savings, enabling individuals to withdraw money before age 59 1/2 without paying an early withdrawal penalty. It also lets you borrow up to $100,000 from your 401(k) -- double the pre-pandemic limits. These are options worth considering, but you should avoid it if you can cover your expenses any other way because it'll hurt the growth of your retirement savings.

If you're laid off, you'll also have to make decisions about what to do with your retirement savings long-term. You can leave it where it is, roll it over into an IRA, or roll it into your new employer's 401(k), if the company allows this, when you find a new job.

If you've lost your job or you fear it's a possibility, now is a good time to update your resume so you're ready to seek out new jobs. Make sure it includes updated information from your latest job and clearly highlights why you were an asset to your employer and how you could be an asset to a new company.

It's good practice to tailor your resume to each specific job you're applying for, but updating it now can give you a good base to work from so there's less work to do when you apply for a new job.

Some companies may not be hiring right now because they're closed or struggling to pay their existing employees, but it doesn't hurt to look and see what other job opportunities are out there. Apply as soon as possible after the listing is posted to give yourself the best odds. If you wait until several weeks after a job has been posted, the company may be so inundated with applications that they never see yours.

ALSO READ: Should You Accept a New Job During the COVID-19 Crisis?

Some jobs are never actually posted online because they're filled by current employees or individuals in employees' social and professional networks. Reach out to yours to see if anyone knows of any opportunities that suit your skills and talents. You may find a job this way that you wouldn't have found otherwise.

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Being laid off or furloughed can definitely cause a lot of financial stress, but it's also an opportunity in some ways. You have this time to spend with your family and to do some of the activities you enjoy without having to worry about work. Opportunities like this are pretty rare, so you should try to enjoy it while you can.

Consider devoting some time every day to an activity you enjoy or try to exercise or get out in nature to help yourself recharge. Figure out what works best for you and make it a priority. It'll make dealing with your other challenges a little easier.

We don't know how much longer this will go on for or what the long-term economic repercussions will be quite yet. All we can do is take things one step at a time. If you've been laid off or furloughed, follow the tips detailed here to get your finances in order and figure out your next career move.

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