Sophia Serrao
Thu, 01/19/2023
After a string of high-profile layoffs at companies across multiple industries, including layoffs announced by Microsoft on January 18, state and federal laws governing mass layoffs and plant closings are receiving national attention.
Under federal law, the WARN Act requires employers with 100 or more employees to provide 60 days’ paid notice if they conduct a qualifying mass layoff of at least 50 employees (including indefinite furloughs). Employers who fail to comply with the WARN Act risk owing lost wages to the laid off workers, daily penalties, and attorneys’ fees. The WARN Act, while always applicable in qualifying settings, also coincides with various state “mini-WARN” laws and regulations. States with “mini-WARN” laws typically cover broader circumstances than the federal law, usually applying to smaller employers.
For example, the Cal-WARN Act applies to facilities in California with 75 or more employees and layoffs of 50 or more employees. Other states with mini-WARN Acts include:
- Hawaii: Applies to employers with 50 or more employees
- Illinois: Applies to employers with 75 or more employees and to mass layoffs of 25 or if they constitute 1/3 or more of the workforce
- Iowa: Applies to layoffs involving as few as 25 employees
- Maryland: While voluntary, the Maryland Economic Stabilization Act applies to employers in certain industries with 50 or more employees
- Maine: Applies to employers with 100 or more employees
- New Hampshire: Applies to layoffs involving as few as 25 employees
- New Jersey: Requires 90 days’ notice
- New York: Applies to private employers with 50 or more employees and lay off 25 or more employees. Also, requires 90 days’ notice
- Tennessee: Applies to employers with 50 or more employees
- Vermont: applies to employers with 50 or more employees
- Wisconsin: Business Closing and Mass Layoff Law applies to employers with as few as 50 employees and layoff of 25 or more employees
If a state does not have a mini-WARN law, employers must follow the federal WARN act requirements.
Relatedly, there is no federal requirement that an employer pay severance to employees they terminate or lay off. However, a few states have specific laws regarding severance pay. Severance pay is the pay employees receive upon termination when provided by the employer or in their employment contract. The length of employment typically determines the amount the employee would receive, but this depends on the agreement between the employee and the employer. Most states do not require severance pay but may regulate aspects of severance payments, such as setting a timeline for severance payments. For example:
- Immediate payment: California, Colorado, Hawaii, Massachusetts, Missouri, and Montana (but employer can have a written policy that allows for 15 days of payment).
- Payment in next business day: Connecticut, District of Columbia, Oregon, Utah
- Payment within 2 days: South Carolina
- Payment within 3 days: Alaska, New Hampshire, Nevada, Vermont
- Payment within 5 days: New Mexico
- Payment within 6 days: Texas
- Payment within 7 days: Arizona (or next payday whichever is first)
- Payment by next payday: Delaware, Idaho (or within 10 days), Indiana, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Nebraska, New Jersey, New York, North Carolina, North Dakota, Oklahoma, Pennsylvania, Rhode Island, South Dakota, Tennessee, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.
- Minnesota requires payment within 24 hours of receiving a written demand from the employee.
Alabama, Florida, Georgia, Mississippi, and Ohio do not have a deadline for payment of severance benefits.
