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Ask HN: How do layoffs in the US work?

6 points by npacenop ↗ HN
As a person working in the EU on an unlimited contract and reading all the headlines about mass layoffs in the US I can't help asking myself - how is that possible there and not possible here? Are unlimited contracts not that typical in the US? Or is it easier to circumvent them and find an excuse/reason to void the contract? In the EU the notice period goes both ways - I can't leave my job immediately, but my employer also can't fire me immediately - from what I read here in the US it is perfectly normal to wake up and find out you've been fired. What am I missing?

30 comments

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salawat
Basically, if you're salaried (Full-time employee) and an executive gets a hair and decides to pivot, then layoffs'll happen. Basically, it's your employer looking at financial prospects and going "We no longer have need of your services."

It is generally coupled with a severance package, which if taken delays your eligibility to avail yourself of your State's unemployment benefits. Many states are at will employment. It is customary to give two weeks notice, but not strictly required.

The U.S. can be a fickle beast.

anon291
> which if taken delays your eligibility to avail yourself of your State's unemployment benefits

It really depends on how it's structured and which state.

spacedcowboy
Europe has much stronger labour laws, and a much deeper social safety net for people who do in fact lose their jobs. Almost all states (Montana being kind of the exception where at-will goes away after the probationary period of your job) have "At-Will" [1] employment, which basically means you can be fired for anything, at any time, without any reason needing to be given, apart from for a few carved-out exceptions; for example, it is illegal to fire you because of your skin colour. If your boss wants to fire you for wearing a blue tie on a Wednesday, you're out.

In many ways worse than the immediate loss of job/income, though, is that your medical coverage is usually (and by usually, I means pretty much always) tied to your employment. So if you're pregnant, or if you're on expensive life-saving medicines, well, you have a problem.

There are various band-aids to try and help people out when they lose their job, but none of them are particularly impressive, looking on them from a European perspective.

I'm a Brit, been here for almost 20 years, basically for the money. I would have left and returned back to the UK 5 years or so ago (having made enough to keep us comfortably for the rest of our lives) but the kid is in school, and my (US) wife doesn't want to uproot him (which is fair). Once he's off to college, I'm going to retire, stay a while on relatively low "income" to get out of the "fuck you" tax for green-card holders leaving the country, and I'm (we're) out of here.

[1] https://en.wikipedia.org/wiki/At-will_employment

PopAlongKid
> your medical coverage is usually (and by usually, I means pretty much always) tied to your employment.

That has not been true for ten years now, with the implementation of the Affordable Care Act (aka Obamacare). It used to be that pre-existing conditions tied you strongly to continuous employment (except for periods of COBRA coverage avaialble), but those are no longer grounds for denying you new coverage. And if your income has dropped a lot, most if not all of the coverage will be subsidized by the government.

spacedcowboy
> And if your income has dropped a lot, most if not all of the coverage will be subsidized by the government

This seems to be very location-dependent. Most states will be reasonably generous and extend Medicaid coverage to you. Some will not. Even when you have Medicaid coverage, it's still a crap-shoot whether a Dr. will take you on as a patient. Hospitals will, in general, but there's plenty of Dr's offices with "No Medicaid" signs in them.

COBRA is an utter joke. If you've just lost your job, how are you supposed to afford $1750/month [1] for medical insurance for your family ?

I think Obamacare was a step in the right direction for health-care in the US. I think it's woefully short of just about anywhere in Europe. The entire healthcare industry in the US seems to pile on huge amounts of stress right at the point where you need to just get well. In-network/Out-of-network, covered/non-covered, co-pays, crazy-high deductibles, the works. In the UK, the only thing I worry about paying for is parking at the hospital...

[1]:https://www.brookings.edu/blog/usc-brookings-schaeffer-on-he...

toast0
COBRA is what it is, if you had high priced employer paid coverage and you want to continue it, it's going to cost a lot.

Otoh, there's exchange plans which tend to be lower cost. All the exchange plans have to cover the same baseline things, but of course how big your share is varies. There's subsidies if your income is low, but not too low for medicaid.

Yes, there's a lot of fussyness in the details, and it can be stressful, but you just go and do your healthcare and wait and see what the bill is, and then decide if you're going to pay it or not. Mostly, there's no requirement to pay at time of service.

spacedcowboy
"It is what it is" is not an acceptable answer, from a European perspective. That's the point I was trying to make.

And I stand by the original claim: "There are various band-aids to try and help people out when they lose their job, but none of them are particularly impressive, looking on them from a European perspective."

legitster
> COBRA is an utter joke. If you've just lost your job, how are you supposed to afford $1750/month [1] for medical insurance for your family ?

Agreed. But that's how much your employer was paying.

I'll die on the hill that the US medical system would be so much better if we just gave that cash to everyone instead.

ThePowerOfFuet
> I'll die on the hill that the US medical system would be so much better if we just gave that cash to everyone instead.

You really don't get it, do you? Remove the profit from the equation.

The rest of the civilised world figured it out decades ago, but the US is just too damned greedy to swallow such a pill.

ozzythecat
AFAIK, under the affordable care act, you can get health insurance at a much more reasonable price, though I haven’t used it myself and cannot comment if it’s equal to quality of care and cost vs. other developed countries.

Everything else you said is spot on.

Not every company will necessarily enforce and fire people at a moments notice. While yes that can happen, I think any reasonable business cares about perception and employee morale.

Aside from that, I think everything you said is spot on.

PopAlongKid
If you are a member of a labor union, there are usually some mandatory negotiations involved around terminations. Otherwise, you can quit any job at a moment's notice, as well as being terminated the same way, although there are often two-week notices (including wages) given both ways by convention.

If you quit, or are fired for cause, you are not eligible for unemployment compensation. If you are laid off for "lack of work", then yes.

legitster
> Are unlimited contracts not that typical in the US?

I had to look this up. This is definitely not a thing in the US. Why would a company even offer that? Also, the US you can basically leave a job whenever you want.

> from what I read here in the US it is perfectly normal to wake up and find out you've been fired

Maybe a cultural difference here, but why would you want it any other way? If I'm notified that I'm going to be fired in 4 months, why would I bother showing up to work those 4 months? You may as well fire me now and pay me the 4 months' salary.

drakonka
> If I'm notified that I'm going to be fired in 4 months, why would I bother showing up to work those 4 months? You may as well fire me now and pay me the 4 months' salary.

Are companies obligated to pay out 4 months' salary if they fire someone?

legitster
No. That was just an example. But severance is pretty universal in the US: https://www.shrm.org/resourcesandtools/hr-topics/compensatio...
drakonka
The first sentence of that article says "While almost all U.S. businesses (97 percent) say they offer some form of severance to workers, only 55 percent had formal, written severance policies last year, a decline from 2011, when 65 percent had formal severance policies."

That seems very not universal. Just because a company says something doesn't mean it follows through, and if it's not formalized it's worthless. A longer notice period both ways seems preferable. Besides, in the EU it is common to take paid leave for a large chunk of that notice period so in addition to having time to tie off loose ends and leave on good terms, you often don't have to work out that whole chunk of time if you don't want to.

tdeck
Also worth noting that a company's formal written policy isn't binding on the company unless it's part of a contract with the employee (which it almost never is).
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HeyLaughingBoy
You're missing that most US workers aren't under contract. You may also be missing that if I decide I'm tired of my job, I don't have to go in on Monday. I don't even have to tell them I'm quitting: I can just mail their laptop back to them and stop communicating. Eventually, they'll figure out I'm not coming back, and send me a termination letter along with my last paycheck.

[edit] While it's certainly rude, there is effectively no downside to me doing this.

> perfectly normal to wake up and find out you've been fired

I should add that this is by no means "perfectly normal." In fact, the reason it makes the news is that it isn't. Most people will have at least some inkling that they're about to be fired or laid off.

pipodeclown
Basically all employment contracts in Europe have a dualsided probatonary period in which both sides can walk away, only if you decide to stay would you have a 4 week notice period from the employee side of the contract.
mattmanser
No they don't.

In the UK[1] the legal minimum is 1 week notice in their first two years of employment, then it's 1 week per year.

It's common in some industries to have a 4 week notice after a 3-6 month probation, but it's not universal.

[1] which obviously had to confirm with EU law, even if it's now left

anon291
In tech sector... You will realistically be given a few months of pay and benefits and maybe a bonus payout (sometimes with conditions). That's really it. They call you in and tell you to hand back your laptop.

Realistically, assuming the job market is otherwise good and you're reasonably skilled, it'll be like a few weeks vacation, at least in retrospect. The times I've been laid off have been some of the nicest most relaxing times of my life, if I look back. Of course no one likes it and I'm not sure I'd want to be laid off in this job market.

musicale
They probably shouldn't be called layoffs - they're actually mass firings, usually to reduce labor expenses.

"Layoffs" implies that it's a temporary shutdown of production and that workers will retained when business conditions improve.

readonthegoapp
i googled 'labor violence in the us' -- b/c i've read before that the history of anti-worker violence in the us is basically insane -- worse than any other industrialized nation.

so of course the first result that comes up is _union_ violence -- against the companies/authorities. :-D

https://www.google.com/search?q=history+of+labor+violence+in...

at least wikipedia is not biased in favor of the people who own the country.