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March 31, 2009

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Dear HR Guy:

Are companies of a certain size required to give employees notice before laying them off? Is this a common practice? Someone told me that there is an employment law that covers this, but I have been unable to find it as I peruse various legal reference resources.

Thanks.

Nancy

Dear Nancy:

On an small scale, barring any employment contracts or organized labor agreements stipulating otherwise, you are free to lay off employees without notice.

However, if you are planning on shutting down a particular work location leading to the layoff of 50 or more full time employees, or if you are planning to lay off a third or more of your workforce at a work location of at least 150 people, you may have to comply with the terms of WARN.

WARN is the Federal Worker Adjustment and Retraining Notification Act and applies to businesses with 100 or more full time employees, or 100 or more employees working a combined total of 4,000 non-overtime hours per week. If this describes your company, in the event of a large-scale layoff described above, you would need to notify each employee being layed off in writing no less than 60 days before the layoff. You must also notify the state labor department where your layoff is taking place.

Don't fool with WARN. Many dot coms have gotten into trouble by having mass layoffs without warnings. Although many claimed the "sudden" change in venture funding was unforseen, the government didn't buy it. Some of these companies are now being held liable for backpay and benefits for that 60 day period!

My best advice to you would be to contact your company's legal counsel before any questionable layoff.

HR Guy

Do you have a question for the HR Guy? Write to him at hrguy@vault.com.

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Filed Under: Workplace Issues
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