Layoff Laws

When companies determine that it is necessary to lay off employees, they must do so in compliance with state and federal laws. For instance, they must be certain not to be in violation of workers' individual rights. In addition, they must notify employees of their rights, including unemployment benefits. In addition, they must comply with well-known laws such as the Worker Adjustment and Retraining Notification Act (WARN). This law requires that companies provide at least sixty days notice when 500 or more employees at one plant are going to be laid off. However, certain states have tougher versions of WARN. For instance, California requires sixty days notice when a company chooses to lay off fifty or more workers. In New York, the requirement is ninety days notice when 250 or more at one site are about to lose their jobs.

Fast Facts

  • In March 2009, I.B.M. laid off 1,400 employees in the U.S. and Canada. Microsoft announced 5,000 cuts over 18 months.
  • There are stiff penalties for companies that violate WARN, including fines and civil penalties.

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