Itcertainly does sound like you are being set up.  You are not wholly with out rights here and if you think that your employer is only offering you a job to help terminate your benefits then you may not have to take it.  You should, though, hear him out and see what he is offering, then let him know you will get back to him.  Then I would go down to unemployment and speak with them about a "hypothetical" situation.  You have heard from some friends at your job that the boss may offer you a position to set you up with less, hours and less pay, etc.  That the employment conditions were abusive.  What should you do if this happens.   If the time and pay is less you still may receive unemployment benefits.   Good luck.