Resign or Be Fired: Which is Better?
If your employer intends to fire you, they may offer you the choice to voluntarily resign instead. There are some benefits to this, namely that it will never be on your "permanent record" that you were fired.
But if the company is firing you (esp with cause), how does it benefit them to let you resign? Simple! In most circumstances, they won't have to pay you unemployment.
Unemployment is a complicated system, but basically employers pay Unemployment Insurance to the state and possibly the feds. If someone is laid off, fired, etc. and eligible to collect unemployed, they then go to the state to get it. A number of factors go into deciding how much an employer pays, and one of those factors is how many employees filed for unemployment the previous year. So the more employees file, the more an employer has to pay. (I used to work for my state UI.)
If you voluntarily resign, you likely won't be eligible for unemployment.
Whether that matters or not really depends on your individual circumstance. If you work in a very high demand field, you'll be able to find a new job pretty quickly, especially with a positive reference from an employer. You will come out ahead financially by getting a positive reference, rather than filing for unemployment. Some employers will also offer some perks for doing this, like a small severence agreement.
It can be tricky if you are in a highly competitive field. It may take you longer to find a job, meaning you would likely need the unemployment income. However, if the field is competitive, it may hurt your prospects for a potential employer to learn that you were fired. You need to weigh the pros and cons.
If you're in a low demand, less competitive field, it is almost always necessary to get unemployment. It would depend on why you're being fired. If you're being fired with cause, you may be ineligible, depending on the eligibility criteria of your state. But also, if the employer is giving you the option to resign, then the cause might not be enough to render you ineligible. You need to know the specifics of your circumstances.
In certain fields, it can definitely be a huge mark against you. In HR, being fired with cause can completely derail your career. You're supposed to know better. For teachers, it can also be an issue because there is such a shortage that it causes suspicion.
Contrary to popular internet myth, it is not illegal for a former employer to tell a prospective employer THAT you were fired.
In some states, it is illegal to tell another employer WHY you were fired. That's a big difference. It also only applies in some states. It isn't HR best practice (I personally would only do it in very specific circumstances) so most HR workers will only answer "term type" (resigned, fired, laid off, etc) and "eligible for rehire". If it is company policy to not rehire a former employee (which it sometimes is) an ethical HR person will disclose that.
Finally, remember that being fired isn't necessarily the career ended we all think it is. When I recruited, I would only exclude a fired applicant if their firing had something to do with a license violation. I was staffing medical, so it could potentially endanger a patient. That was all I really cared about.
Give all factors due consideration and let me know if you need any advice.
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