Which is better? Being with employer without salary or being terminated?

I have been with this employer for almost 11 years. The employer is a consulting company and I have been working for their clients. The contract with the client came to an end on Nov 30th. I was expecting my employer to keep me on bench with pay until next client is found or at least for next two months. But, my employer called me today and gave me two options:

a) I can stay with the company payroll but without pay from Dec 1st. In order to have the continuous insurance, I have to pay the company for the medical/dental/vision group insurance plan.

b) I will be terminated. I can file for unemployment benefit. I can have COBRA insurance by paying on my own.

I was shocked to hear this. I asked my employer couple of days to decide about this. My questions are:
1) First of all, can my employer do this to me?

2) Is there anything I can use against my employer to stop this? Is there any law that protects employee like me in this kind of situation? Can labor department can be notified about this? or is there any other option available out there?

3) If I cannot do anything and if I have to take any one of the above mentioned options given by my employer, which one is better for this situation and why?

Thanks.

KP7689

You cannot be employed without pay - even if your employer is contributing to your health plan. Some employers will keep employees on their plan for a period after termination as a sort of severance package - but they are still unemployed.

If you are without pay you are terminated.

You are probably better off with unemployment and taking COBRA - although COBRA can be very expensive. Your employer is just trying to avoid paying unemployment insurance. He'll make off better that way. But it is in violation of FLSA - you have to be paid at least minimum wage.

bobby v

If you voted for Obama, you can ask him for assistance.

Judy

Uh, of course your employer can do this, it's called being laid off. There is nothing you can do to stop it, and what do you expect the labor department to do for you?

Your expectations were way too high if you expected him to keep you on the bench WITH pay.

If you think it's likely he'll find other clients quickly, option (a) could make sense. In reality, option (b) is probably better for you.

Tim

The contract is over and they can get rid of you. They have violated no laws.

I think the employer is being generous to allow you to stay on the books to keep your health insurance giving you a couple of months to find a new job.

Either that or you can go on Cobra payments which are usually higher.

I'd look to see which has the lower cost to you. Then start looking for another job.

John Ber

Questions: are you eligible for any severance pay or vacation pay if you take the termination option - you would not want to lose out on this if you stay on with the company? do you have any savings that will let you pay your own expenses and healthcare for a few months?

Take option A, if you can afford to not have a paycheck for a couple months and here's why. This gives you time to look for another job, the employer can't have you work for free so you have zero job responsibilities until things pick up with a new contract and the company can afford to pay you. The employer will appreciate your being available in case of an occassional question is asked and you can be assured of a good reference while you look for paying employment. If you already have an employer, then it might be easier to find another job while you are employed and you won't have an employment gap that employers get anxious about. Later if you need the unemployment check, you can probably request to be terminated and file for unemployment then - just confirm that your employer would not protest your unemployment claim if you needed to file in a few months if business does not pick up.

Option B: this gives you an unemployment check from the government for perhaps six months so if you have no savings to tide you over for a few months, you need to take the layoff now. If you take optional Cobra, it only lasts for one -year maximum and there is usually an extra 1-2% uplift for the company's use of COBRA so it increases your health care costs. If you are in your 40's or 50's or have had any health problems in the past 10 years, getting insured after your Cobra runs out could be problematic.

Your employer is trying to be nice by offering you a choice of options. It's unfortunate that economy is so bad.

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