Just been pink-slipped? Here's what to do next.

Job cuts don't seem to be slowing in the U.S. In February, the ranks of unemployed Americans increased by 851,000, bringing the total number of jobless workers to 12.5 million.

Should you find yourself being handed the dreaded pink slip, here are the first steps to take.

Choke back tears, unclench fists, and before you walk out of your boss's office, know where you stand in terms of a severance package. Employers are not required to give you a severance, but if they do, review all the details with your boss or with the human resources manager.


You can negotiate to receive severance money all at once or over a period of time. Which is a better option depends on where you live and what sort of financial padding you have. While unemployment specifics vary state to state, if you'll be getting a check from your employer, you will probably not qualify for unemployment. If you opt to collect a lump sum, some states will even take into account how much you receive and then break that amount down into "paid" weeks. Decide whether you need the cash all at once, and if you'll budget it wisely if you do take a single payout.

Remember, even if you are offered a severance, you don't necessarily have to accept it. If collecting unemployment is going to get you more money, simply refuse the severance.

Typically, if you receive your severance as cash, you will have to pay taxes (yes, you still have to pay taxes!). If you're worried about your year-end tax bill, opt to spread out your payments over time. You could also ask about investing your severance into an annuity or IRA--but remember you'll still have to wait out the weeks until you can collect unemployment.

Also be sure to ask about potential for payment on any accrued vacation, overtime and sick days.

Taken from Forbes.