A friend was recently informed that his project at work ran out of money, and he should not show up for work again. His boss also informed him that he was not "let go" and would have to turn in a resignation letter if he got another job (even though he was not being paid).

I'm guessing this is a tactic to prevent him for filing for unemployment, but is there any good reason my friend should put in a 2 week notice, and what should he say during interviews about his employment status.

This is in an "at will" state in the USA.

EDIT: My friend asked around afterwards and he is not the only person given the "We can't pay you but you still work here" speech.

  • 14
    If they're not getting paid, they're unemployed.
    – DA.
    Commented Dec 31, 2014 at 20:04
  • 1
    Unemployment insurance also depends on which state they are in - the rules vary. workforcesecurity.doleta.gov/unemploy/uitopic.asp
    – ColleenV
    Commented Dec 31, 2014 at 20:16
  • @DA not being paid frustrates the contract
    – Pepone
    Commented Jan 1, 2015 at 12:19
  • 6
    This is not company specific vote to keep open
    – Pepone
    Commented Jan 1, 2015 at 21:44
  • 5
    It's been reopened. And the term your friend needs to use is "laid off" regardless of whether his boss wants to use it or not. He (and others) were clearly laid off.
    – Chris E
    Commented Jan 2, 2015 at 17:12

4 Answers 4


Unemployment compensation has little to do with resignation but rather is based on reduction in hours. If the amount of work decreases by a certain percent, your friend is laid off. Whether it's permanent or not is irrelevant. Your friend would likely qualify as a result, after a week or 2 waiting period which may vary by state.

It may well be that this boss is thinking that if the friend resigns, he can contest the unemployment claim as a result.

Were it me, I'd try to get something in writing that the funding is gone and/or that he should not show up for work.

In my opinion, he should go to the unemployment office as soon as he can to get the process started. They'll ask if he has a termination letter and he can put down "No". Don't worry, they'll be able to tell in a few weeks that he's no longer getting paid from their own records.

It's important to file right away because unemployment compensation not retroactive. If he files in 2 or 3 weeks, the typical 1 to 2 week uncompensated waiting period begins then and it doesn't count what's already elapsed.

  • 6
    Agreed. The State Department of Labor has a set of rules that they can apply to determine whether what happened amounts to a layoff. And if they determine what happened is a layoff, they'll make the employer cough up their share of the unemployment benefits. Hopefully, the OP has already collected references that are reliable. At any rate, the OP has nothing to gain by failing to claim the unemployment benefits immediately. Lawyers are irrelevant if the State Department of Labor does its job, as per its charter. Commented Dec 31, 2014 at 21:34
  • 5
    Actually they take your word for it and then if you lie the computer catches you either at tax time or the next time you try to file for unemployment. Unless the company denies that you are let go or reduced in pay. Then they do research on the subject. A person can get in alot of trouble for misleading the ES Investigator, that is true of employers and employees. Commented Dec 31, 2014 at 21:54
  • Take your word for it about which?
    – Chris E
    Commented Dec 31, 2014 at 21:56
  • 1
    Once company I worked for put some people on a week long furlough and they all got unemployment. Nopaycheck even if it is temp means unwmployment benefits are very likely possible most places in the US at least.
    – HLGEM
    Commented Dec 31, 2014 at 23:12
  • That's why i say it varies by state. In Georgia, there is one week that you have to claim but won't pay for.
    – Chris E
    Commented Dec 31, 2014 at 23:21

This will depend on your friend's locale. In most areas I'm familiar with, "go home because there's no money/work for you" is being laid off.

In the best case, the company will start paying your friend again once there's more work. In the more common case, the company is slowly dying and your friend should look for more work ASAP.

In both cases, the boss is mistaken. As soon as the employee is no longer being paid, they're unemployed. It may be a (possibly illegal) tactic to trick your friend into quitting instead. Again, this depends on the locale and your friend should not trust a non-lawyer about employment legalities. Their boss and myself included.


I'd consult an employment attorney, if possible.

If your friend was just "told" not to show up, don't fall for it. He should keep showing up. If he misses three days in a row, they could claim he "abandoned" the job of his own free will. Unless he has something in writing, keep showing up and clocking in.

This has the smell of a scam all over it.


I agree with @WesleyLong that this has the appearance of the company trying to "pull a fast one." It looks like they are trying to layoff the OP without actually performing a layoff.

Assumption: There is no employment contract or union contract which has rules about this kind of thing.

First - All communication should be in writing, or be acknowledged and confirmed in writing. The instructions from the boss should be confirmed with an email, with a copy to Human Resources and to his supervisor. The email should ask for a projected date when work will resume. If the employment includes benefits, the email should inquire about the status of those benefits.

Second - The friend should check on the unemployment insurance rules in their jurisdiction and apply if eligible. Terms to look for are "reduced hours", "furlough" and "lay off." The fact that the company doesn't call it a layoff doesn't mean that it isn't.

Third - The friend should immediately begin looking for alternative employment. If this company remains attractive to the friend, then perhaps looking for temporary employment is a reasonable alternative.

Fourth - Your friend is under no obligation to remain available or to inform the company of their employment situation, and I would do neither. If called to return, your friend can make the decision about whether to do so or to decline.

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