By Trista Brantley, Myla McLeod, Samantha Schwartz, and Anastasia Thumser
Mass layoffs have become increasingly common in the workforce; they can affect any company at any time. Given the effects that mass layoffs have on businesses and employees, it is vital to understand their legal implications.
In most mass layoffs, many employers must comply with the Worker Adjustment and Retraining Notification (WARN) Act. Ensuring compliance with the WARN Act helps maintain a company’s reputation and employee morale while minimizing potential legal disputes.
Many Employers Are Required to Give 60 Days’ Notice
The WARN Act was enacted by Congress on August 4, 1988. It covers three categories of mass layoffs:
- At least 50 employees are laid off during a 30-day period, and the laid-off employees make up at least one-third of that workforce.
- 500 employees are laid off during a 30-day period, no matter how large that workforce is.
- An entire work site is closed and at least 50 employees are laid off during a 30-day period.
In the case of a mass layoff, the WARN Act requires employers with 100 or more employees to provide 60 days’ notice, during which time employees are entitled to full compensation. The purpose of this notice is to provide transition time to obtain other employment.
If any of the three situations outlined above occurred at your place of work, and a notification of the layoff was not received 60 days prior, the WARN Act may entitle you to back pay and benefits owed by your employer for up to 60 days. In addition to notifying affected workers, employers must also provide notice to any unions.
State Laws Can Cover Layoffs too Small for Federal WARN Act
In addition to the federal WARN Act, many states also have laws protecting employees, including California, Hawaii, Illinois, Iowa, Maine, Michigan, New Hampshire, New Jersey, New York, Tennessee, Wisconsin, and others.
These state laws may apply to layoffs too small to be affected by the federal WARN Act, and they may also have different penalties and enforcement.
Sanford Heisler Sharp McKnight is a nationally acclaimed civil rights and employment rights law firm. We are dedicated to upholding the rights of workers at all levels, across the country, with offices in New York, Washington, DC, Nashville, Palo Alto, San Francisco, and San Diego.