So you start to notice the water cooler rumor mill is buzzing that a massive layoff is coming. You start to panic about next month's rent and if you'll get a month's, two weeks or even two days notice. Before you search the wanted ads and every website you can think of, take a deep breath, because you may not be laid off at all. Or, the company may be required by federal law to give you two months' notice.
Since 1989, large companies in the United States have been required to let employees know 60 days in advance if there is going to be a massive layoff. This rule was enacted by the Worker Adjustment and Retraining Notification Act (WARN).
"Large Company" Qualifications
In general, an employer must have 100 or more employees working more than 20 hours each for over half of the year in order to be liable for the two-month layoff notice. Any private company is covered by this rule, whether nonprofit or for profit. However, under this rule, the government is not required to give notice to its employees. (In a recession, financial industry personnel are often hit hard. Find out how to avoid getting the ax, read Top 6 Ways To Recession-Proof Your Job.)
The notification requirement varies, based on whether it is a plant or location closing, if it's a massive layoff, and the total portion of the workforce being laid off. A layoff of only a few employees will never require the WARN letter notice. A layoff of 50-499 employees who have been working for the company for more than six months is covered, as long as the exiting employees represent at least 33% of the employees at a given employment site.
For example, if a location has 200 employees, and 50 employees are going to be laid off, 60-day notice is not needed. However, if there were 66 or more employees that could lose their jobs, then 60 days notice is needed. In massive layoffs of 5,000 or more, there is not a minimum percentage, all employees must be notified.
The closing of a plant or one single location that has 50 or more workers will require notice to be given. This applies whether you are a marketing manager or a forklift operator. (Joblessness is temporary, but neglecting your retirement savings has permanent consequences see Laid Off? You Can Still Retire.)
How Notification Is Handled
WARN notifications are sent to unionized labor representatives for unionized employees, and individual unrepresented employees who could be subject to the layoff. For instance, if you work in a position that is unionized, such as an airline mechanic, your company just has to send notice to the union. If you work in a non-unionized management position, you are required to get an individual letter.
Exemptions are provided for such acts as natural disasters and "unforeseeable business circumstances." For instance, if a tornado hits an office building, your company will not have to give you notice that your job is lost. There's also the figurative tornado of a major client unexpectedly terminating their relationship. For example, if you make student desks and the school district the company makes most of your desks for cancels its orders.
While "unforeseen business circumstances" are considered a reason to avoid the 60-day notice rule, it is not considered a reason to give no notice. Employers are still required to give as much notice as possible. (If you must leave your job, go out fighting for the best benefits you can get The Layoff Payoff: A Severance Package.)
If you are an independent contractor or a temporary employee, you will never be required to be given notice. Thus, it's more important for you to gauge the possibility of a company closure or layoff, whether or not a WARN letter will go out.
Places to Find the WARN Letter List
Certain states do post which companies are undergoing layoffs You can find links to many states on the Oklahoma Department of Commerce's Web site.
Trying to predict whether your company will have a massive layoff can feel like trying to predict an unexpected rain storm. However, WARN letters can act like a trusted and accurate meteorologist. If you work for a large company and aren't an independent contractor or temporary employee, watch for WARN letters before panicking about finding a new job or paying next month's rent. You can use the two months you have, once warned, to find a job and set aside money until you get your next job. (For more information on planning for a layoff, please read Planning For Unemployment, and for information on budgeting for pitfalls in self-employment income, please read Surviving On An Irregular Income.)
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