Perhaps one of the most challenging aspects of an employer’s job is the regrettable necessity of laying people off when they’ve done nothing to warrant dismissal from their jobs. But particularly in the COVID-19 world, many businesses have suffered irreparable economic blows that lead to inevitable employee layoffs or termination. It is important to note that employees typically have no legal right to retain their jobs. Employers are allowed to structure and restructure their workforce in any way they deem necessary to remain profitable as the economy shifts.
But both state and federal laws do give employees the right, under certain circumstances, to advance notice before their company lays off a significant number of people. When employers do not provide proper notice, employees may have the right to receive compensation in the form of monetary damages. Consulting with an experienced employment legal practitioner is the best way to ensure that you are not breaking the law as you make these tough decisions. But here is some basic information that may assist you in the meantime.
Federal Law and the WARN Act
The Worker Adjustment and Retraining Notification Act (WARN) is the federal law that gives employees the right to notice before a company rolls out mass layoffs. The intention of Congress is to give workers a chance to find alternative employment and minimize financial hardships resulting from job loss. But the Act applies only in limited circumstances, so employers should acquaint themselves with its specifications and requirements.
Which Employers Must Comply with the WARN Act?
This legislation applies mainly to large companies. If you run a small to mid-sized business, the chances are that this federal law does not affect you. If you have any questions about whether this rule applies to your company, contact an experienced employment law legal practitioner. They know all the ins and outs of the WARN Act and can advise you accordingly. But generally speaking, you must provide WARN notice if:
- You employ at least 100 full-time employees;
- You slated at least 50 people for layoffs; and
- The employees to be laid off all work at a single employment site.
But each of these elements has some qualifications as well.
At least 100 full-time employees
To be more specific, the WARN Act applies to your business if you have a minimum of 100 full-time employees or a minimum of 100 employees who work a combined average of at least 4,000 hours per week. The WARN Act defines a full-time employee as a worker employed at the company for a minimum of 6 out of the 12 months directly preceding proposed layoffs who work a minimum of 20 hours per week.
Minimum number of layoffs
The WARN Act applies only to companies planning mass layoffs or plant closings. To qualify as a mass lay off under the Act, the reduction in personnel must:
- All occur at a single place of work; and
- Be for either:
- 500 employees facing a loss of employment; or
- 50 to 499 employees, as long as this number represents 33% or more of the employer’s workforce.
For this Act’s purposes, a “single place of employment” is one geographical location where the company has a building, offices or a suite of offices, or a group of buildings that form an industrial park or office park.
As stated, the law applies to plant closings as well. The WARN Act defines plant closings as a 30-day period within which a company shuts down a single place of work—or a single unit within a place of work—resulting in 50 or more workers losing their jobs. It is also important to note that companies are not allowed to stagger these closings. In other words, a company cannot take three months to close a plant, only letting 20 people go each month, in an effort to avoid notice requirements.
Notice Requirements Under WARN
WARN requires businesses to give affected employees a minimum of 60 days’ notice. This notice must include specific information regarding upcoming layoffs and terminations. Employees need to know if the layoffs are temporary or permanent in nature. They also need to know the dates layoffs will begin and how management will notify those who are losing their jobs.
These requirements are subject to exceptions, however. Speaking with an employment legal practitioner will help you sift through the exceptions and determine if you must provide notice as specified above.
Maryland State Law
Before October 1, 2020, Maryland did not require notice to employees slated for layoffs. Maryland law suggested and even encouraged employers to provide notice. But state law did not mandate such notice. However, the General Assembly enacted new legislation requiring mandatory notice of mass layoffs and plant closings, among other things. Many refer to this as a mini-WARN law because it so closely mirrors the federal legislation detailed above.
Now, employers who have operated in Maryland for at least one year as a commercial venture are subject to notice requirements. The company must also employ a minimum of 50 people to fall under this law. The new regulations require such businesses contemplating mass layoffs to notify affected individuals at least 60 days before layoffs begin. The notification must include:
- The date the workforce reduction is set to start;
- The permanent or temporary nature of the layoffs;
- If temporary in nature, the expected duration of layoffs;
- Whether the business is shutting down permanently; and
- The contact information for someone who can answer any questions an employee may have.
If you are a Maryland employer that expects to reduce your workforce in the foreseeable future, contact an experienced lawyer for layoffs so you can be sure to cover your legal bases.
We Are Here to Answer Your Questions
Maryland layoff laws can be confusing. The attorneys at the Smithey Law Group are experienced and knowledgeable employment law professionals. We are here to help business owners keep in step with regulatory changes that may impact their company. Protect your investment today by calling us at 410-919-2990, or contact us online today.