If you’ve been laid off in Maryland, your rights as a laid-off worker cover five things: advance written notice from larger employers, your final paycheck on the next regular payday, unemployment benefits of up to $430 per week for up to 26 weeks, continued health coverage through COBRA or a Marketplace plan, and time to review any severance offer before you sign away the right to sue. What follows walks through each one in the order you’re likely to need it.
The 60-Day Notice You Should Have Received
Maryland’s Economic Stabilization Act requires any business employing at least 50 people in the state to give 60 days’ written notice before a mass layoff or plant closing.1Maryland Department of Labor. Economic Stabilization Act Frequently Asked Questions The trigger is a workforce reduction of at least 25 percent or 15 employees, whichever is greater, over any three-month period. Notice goes to the Maryland Department of Labor’s Dislocation Services Unit, any union or employee representative, and the chief elected official of the local jurisdiction.2Maryland Department of Labor. Work Adjustment and Retraining Notification and Other Layoff Resources
The federal WARN Act layers on top. It applies to employers with 100 or more employees and requires the same 60 days’ notice before a plant closing or a mass layoff affecting 50 or more workers at a single site.3U.S. Department of Labor. Plant Closings and Layoffs Because Maryland’s threshold is lower, mid-sized employers often owe state notice when federal law wouldn’t require any.
Both laws allow shorter notice in narrow situations: a company actively seeking financing that reasonably believes an announcement would scare off lenders, or sudden business circumstances outside the employer’s control, such as a major customer canceling a contract.4eCFR. 20 CFR 639.9 – When May Notice Be Given Less Than 60 Days in Advance Even then the employer must give as much notice as it can and explain the shortfall. Neither law applies to small employers or to individual firings, so a routine termination or a layoff at a small business won’t trigger either.
Your Final Paycheck and Unused Leave
Maryland’s Wage Payment and Collection Law requires your employer to pay all wages you earned through your last day by the next regular payday, as if your employment hadn’t ended.5Maryland General Assembly. Maryland Code Labor and Employment 3-505 – Payment on Termination of Employment That covers salary, commissions, bonuses, and overtime.
Accrued leave is a different question. The default is that your employer owes it to you. The employer can avoid paying it out only if all three of these are true: there’s a written policy limiting or excluding payout at termination, you were notified of that policy, and the policy’s terms don’t entitle you to the money.5Maryland General Assembly. Maryland Code Labor and Employment 3-505 – Payment on Termination of Employment No written policy, or no notice of one, means you get paid for your balance.
If your employer withholds wages and the shortfall isn’t the subject of a genuine dispute, a court can award up to three times the unpaid amount plus attorney’s fees.6Maryland General Assembly. Maryland Code Labor and Employment 3-507.2 – Recovery of Unpaid Wages That treble-damages provision gives you real leverage if a final check doesn’t arrive.
Filing for Unemployment Through BEACON
Maryland pays unemployment benefits of $50 to $430 per week, based on your prior earnings, for up to 26 weeks.7Maryland Department of Labor. How to Apply for and Collect Benefits To qualify, you need wages of at least $1,176.01 in one calendar quarter and a minimum of $1,800 spread across at least two quarters of your base period, which can reach back as far as 18 months. You also have to have lost the job through no fault of your own, which a layoff satisfies.
File online through BEACON, Maryland’s unemployment insurance portal.8Maryland Department of Labor. Maryland Unemployment Insurance Have your Social Security number, 18 months of employment history with exact employer names and addresses, and bank information for direct deposit ready before you start. When the system asks for your separation reason, choose “lack of work.”
There’s a one-week unpaid waiting period at the start of every claim. After that, the state sends a monetary determination letter showing your weekly benefit, and payments arrive within a few business days of each certified week.
Weekly Work Search Requirements
To keep collecting, you must complete at least three job search activities each week, and at least one must be a direct employer contact: a submitted application, an email to a hiring manager, a phone call, or an interview.9Maryland Department of Labor. Knowing Your Job Search Requirements Log every contact with the date, employer name, job title, how you applied, and the employer’s contact information. The Division of Unemployment Insurance can ask for the log at any time, and not having it is one of the most common reasons people lose benefits.
Keeping Your Health Insurance
Three options cover most laid-off Maryland workers, and they depend on the size of the employer you left.
If your employer had 20 or more employees, federal COBRA lets you stay on the group health plan for up to 18 months. You pay the full premium plus a 2 percent administrative fee, capped at 102 percent of the plan cost.10U.S. Department of Labor. FAQs on COBRA Continuation Health Coverage for Employers and Advisers
If your employer had between 2 and 19 employees and wasn’t subject to federal COBRA, Maryland’s continuation coverage law under Insurance Code Section 15-409 gives you a similar right to stay on the group plan at your own cost, generally for the same 18-month window.11Maryland General Assembly. Maryland Insurance Code 15-409 – Continuation of Coverage You generally need to have been enrolled in the plan before the layoff.
Losing job-based coverage also opens a 60-day Special Enrollment Period on the Health Insurance Marketplace.12HealthCare.gov. Getting Health Coverage Outside Open Enrollment You don’t have to try COBRA first. With a sharply reduced income, premium tax credits often make a Marketplace plan cheaper than paying the full group premium, so price both before you commit. If you take COBRA and later let it run out, that expiration opens its own 60-day Marketplace window.
If You’re Offered Severance
Severance isn’t required by Maryland law, but when it’s offered, the paperwork almost always includes a release of legal claims against the employer. That tradeoff can be fair, but read before you sign.
If you’re 40 or older, the Older Workers Benefit Protection Act requires the employer to give you at least 21 days to review an individual agreement, or 45 days if the layoff is part of a group program. You then have 7 days after signing to revoke.13U.S. Equal Employment Opportunity Commission. Understanding Waivers of Discrimination Claims in Employee Severance Agreements An employer that pressures you to sign on the spot or shortens these windows may not have a valid waiver of your age discrimination claims.
Look hard at any non-compete, non-solicitation, or confidentiality language. Maryland limits non-competes for employees earning below a set income threshold, and enforceability depends on how broad the restriction is in scope, geography, and duration. If anything in the document could restrict where or how you work next, paying an employment attorney for an hour of review before you sign is usually worth it.
Taxes and Your Retirement Account
Severance pay is treated as supplemental wages, with federal withholding at a flat 22 percent (37 percent on amounts over $1 million for the year), plus Social Security and Medicare.14Internal Revenue Service. Publication 15 – Employer’s Tax Guide Unemployment benefits are fully taxable federally too, and Maryland does not automatically withhold from them.15Internal Revenue Service. Topic No. 418 – Unemployment Compensation You can file IRS Form W-4V to request voluntary withholding or make quarterly estimated payments. Collecting benefits for several months with no withholding often produces an unwelcome bill at filing time.
Don’t cash out a 401(k) in a panic. Withdrawals before age 59½ generally carry a 10 percent early withdrawal penalty on top of income tax.16Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions One exception, the Rule of 55, lets you take penalty-free withdrawals from a former employer’s 401(k) or 403(b) if you separated from service during or after the year you turned 55. The money is still taxed as income, and the rule only applies to the plan held by the employer you left, not to IRAs or plans you’ve already rolled over.
To move your retirement savings without taxes or penalties, ask the plan administrator to send the funds directly to an IRA or new employer’s plan. If a check is paid to you instead, you have 60 days to deposit the full amount into a qualifying retirement account, or the IRS treats it as a taxable distribution.17Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions A direct rollover avoids that trap entirely.