Laid Off, Fired, Quit, Resigned -- What's the Difference?

terminationWritten by CareerBuilder for AOL

Understanding the terms of leaving a job

When asked why you left your last job, you only have one of two options to choose from: You left willingly or they forced you to go. Your preferred answer, however, is probably more nuanced than either of those options. You don't want to admit that you deserved a raise they weren't willing to pay or that your boss picked her teeth during meetings and you couldn't take one more day of it.

If you left willingly, you probably have one of these soundbites ready to go:

  • "I was ready to broaden my skills and explore new opportunities."
  • "Although I gained new skills and had a great experience at XYZ Company, my opportunities to grow were limited and I'd like to be in a place where I can see my future."
  • "After spending 10 years in the same industry, I realized I wanted to use my skills and expertise for a better cause, which is why I was drawn to your company."

And if you were let go -- even if it wasn't your fault -- you might fear a stigma associated with being unemployed. Many hiring managers understand that businesses have to lay off good workers, but some don't. In order to present yourself in the best possible manner, you need to recognize the differences between the four most common reasons given for leaving a job: quitting, resigning, being fired and being laid off.


What happened to me?

To help understand the differences, we asked Beth Carvin, the CEO and president of Nobscot Corporation, a human resources and software company, to explain. As a veteran of the recruiting and HR industry, she has been on the employer's side of the desk and knows how job seekers should present their work histories.

"Quitting is an informal way of saying an employee is voluntarily terminating their employment. Resigning is a more formal way of saying the same thing," Carvin says. "Being fired is an informal way of saying an employee has been involuntarily terminated for cause. Being laid off is term that used to describe being involuntarily terminated due to a reduction in force."


How does your departure affect your wallet?

Before you begin answering questions about your last job, you'll probably need to deal with the practical side effects of not working. Unless money is of no concern to you, understanding what financial repercussions come with quitting versus being laid off is important.

"If an employee is terminated for cause -- got fired -- then they should not expect to receive any benefits beyond what is required by the law," Carvin explains. "They will be paid for hours worked and will be eligible to continue to purchase health benefits through the company for a specified period of time. Typically they will not be eligible for unemployment insurance, although eligibility is determined by the state, not the employer."

The situation differs slightly if you quit or resign. Carvin warns these workers not to anticipate receiving benefits outside of the company's legal obligations.

"In most cases, [workers who quit] would be unlikely to receive unemployment benefits unless it was determined they felt forced to quit the job due to intolerable conditions," she says. "This is called 'constructive discharge' and is viewed as being involuntary rather than voluntary."

Being laid off, while obviously unwelcome, offers financial benefits that voluntarily resigning and being fired for cause do not.

"If an employee is involuntarily terminated through no fault of their own -- laid off -- they may be eligible for severance pay and unemployment insurance," Carvin says. "Some companies also provide severance pay when it's mutually agreed upon between the employee and the employer that it is best for the company and the employee that they leave."


How do I explain my situation?

Understanding the cause for separating from the company is important, but it's only half of the issue. You will inevitably be asked why you're looking for a job, and Carvin advises against stretching the truth in order to save face.

"Honesty is always the best policy. The hiring company will be conducting references on applicants who are being strongly considered and the truth will come out at that time."

But that doesn't mean you can't soften your answer.

"If you quit due to a bad experience, you can use the positive-negative-positive [technique]," Carvin says. "Start by describing all the positives that you have gained from being in the position, then state the negative factually and unemotionally, then end with some additional positives of what you are hope to achieve with your next company."


Bringing up the topic

The job search can feel one-sided for anyone, with applicants sending their cover letter and résumé to an employer and never hearing back. When you send a résumé that shows your previous job's end date and shows no sign of current employment, you probably worry that you won't be considered for the position before you can give your side of the story. One option to ease your anxiety level is to confront the issue at the start.

"Generally, you would not include the type of termination on a résumé," Carvin cautions. "If, however, you were laid off through no fault of your own, such as the company was closing or going out of business, it might be advantageous to include that on the résumé. The cover letter would be a good place to make some explanations if your work history suggests that you are not capable of maintaining a position."

While you don't want to make termination the first thing an employer reads on your cover letter, you do want to make ensure that you are in control of the message you're sending. Tactfully and concisely explaining your situation prevents the hiring manager from playing a guessing game and hopefully eases your anxiety when hitting the "submit" button on your application.

Next: How to Quit Your Job: 10 Overly Dramatic Resignations >>

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