I work at a small PROFITABLE IT consulting firm in USA and I just finished two projects successfully, fighting with some "manageable" health problems (IBS).After that, I have not had a project for about a month, but was paid wages.

My employer just informed me that I have been effectively laid off because there are no projects currently and they do not see any coming in the next 3-4 months.

I have been given two options - accept a lay off OR work without pay until a project comes. I will NOT be compensated for the months in which I am waiting. It does not seem unfair to me, but is this practice seen in the industry ? Also, I don't have any agreement which says that the employer must pay me during the "dry" months.

I am not sure what the law says, but I heard that a company must give a notice in advance (one month maybe ?) before they announce such lay offs. Is that correct ?

What complicates the matter is that I had an unexpected medical procedure which cost a couple of thousands. Given the problem, more could follow.

I need to know my options in this case, besides (the obvious) looking for a new job. Can I still get health insurance without being paid a wage ? Would it be fair to ask for a grace period in which I get paid and look for a new job ?

Thanks in advance.

  • A great deal will depend on the country in which you're working (local laws vary) and exactly what your relationship is to the company. Are you an employee of the consulting firm? Or are you a contractor? Or is the firm just referring you to other companies that you then become a contractor for? Commented Apr 4, 2014 at 19:12
  • Voting to close as generally looking for legal advice, as well as being a poll. That said, in my locale this sort of thing is extremely common. I'm surprised you made it a month without a project.
    – Telastyn
    Commented Apr 4, 2014 at 19:16
  • 2
    If suspect if you check your contract it will state that in the event you are on bench for 30 days with out being assigned to a client or project the company can choose to lay you off. That would serve as any notice required. While you are laid off you should be eligible for unemployment though whether you work with out pay or not. You should be eligible for COBRA Coverage and your company is required to provide you with infromation about it when they lay you off. They are not going to give you the grace period though. Commented Apr 4, 2014 at 19:56
  • 1
    This is borderline legal question but even if it is not a legal question it is basically a what job should i take/how do I find a job question which is also off topic. Commented Apr 4, 2014 at 19:57
  • @JustinCave - I am an employee of the consulting firm and I end up working as a contactor for clients. I am from the US. Added it to the question. thanks. Commented Apr 4, 2014 at 22:51

3 Answers 3


I have been on both sides of this situation, as an employee in a consulting firm in the telecommunications industry (in the United States) and later as a project manager in the same firm.

The simple fact is if you do not have an employment contract (and in my experience they aren't common in the US) or are a member of a union with a contract with the company, you are considered an "at-will" employee, which means they can terminate you for any reason they want with or without notice (and likewise you can leave of your own accord for any reason with or without notice).

So the fact that you don't have a project and they don't want to pay you any longer to do nothing, is entirely legal. I've face this situation as an employee and fortunately something always came up, so I never managed to get laid off, however, there were times it was very close. I've had times where it was strongly encouraged that I take some of my banked vacation time for a week or 2 so they had a little time to find a new project for me. But I was never asked to work "for free" during a period of time.

And on the flip side, I've face this situation as a project manager in dealing with my own employees. It was a decision that I never enjoyed making and tried to find something, but it was necessary to ensure projects and overhead spending never went over budget. I've never asked anyone to work for free either, so the fact that they did so is quite unusual in my experience (and depending on the locale, may not even be legal, although I'm not a lawyer, so take this with a grain of salt).

Many times companies of this nature, while being profitable, live "invoice-to-invoice". Often they simply do not have cash around to pay people when they aren't actively working on a project and making money. Depending on your exact line of work and your exact skills, upper management may see you are easily replaceable because they know if they let you go and a project comes up requiring your skill set, they can rehire you or find someone else with similar skills quickly. It is the unfortunate fact of working in the consulting industry.

From the medical insurance side, Joe's answer really hits everything. they are required by law to offer you COBRA coverage so you can maintain your current insurance, but you have to pay the premiums. The Affordable Care Act may also you options to get insurance coverage on your own.

So in short, the best advice I can offer you is start working your contacts. When projects get close to the end and there doesn't seem to be another coming up, always started putting feelers out.

I left this company over a year ago (for my dream job) but I still get contacted by recruiters looking for people with my skillset, so I always try to refer friends that I know are looking. that is why it is wise to keep in touch with everyone you have worked with in the past (former clients, managers, co-workers, and even people you have supervised) as well as recruits you have run into, and check in with them regularly. You never know who might be looking.


I am not sure what the law says, but I heard that a company must give a notice in advance (one month maybe ?) before they announce such lay offs. Is that correct ?


Can I still get health insurance without being paid a wage ?


The Affordable Care Act gives you the ability to get insurance, even with a pre-existing condition, and even without being employed.

COBRA also allows you to continue your current healthcare for a year after separation, provided you pay the premiums.

Would it be fair to ask for a grace period in which I get paid and look for a new job ?

You can ask for anything. As they say - it never hurts to ask.


Basically, it comes down to

  • Do I work without pay until a project comes?
  • Do I collect unemployment benefits until a project comes?

Hint: keep the cash reserve up at all costs - there's no telling what else can go wrong and you need that cash reserve to cope with that eventuality. And rather than passively wait until a project comes along, I suggest that your waiting takes the form of aggressively looking for another job :)

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