Legal Definitions - Mass Layoff

A Mass Layoff is a specific term under U.S. labor law, primarily defined by the Worker Adjustment and Retraining Notification (WARN) Act. The WARN Act requires certain employers to provide advance notice to employees before a significant reduction in their workforce.

Specifically, a mass layoff occurs when an employer with 100 or more full-time employees plans to lay off:

• At least 500 employees at a single site of employment during a 30-day period, regardless of the total size of the workforce; OR
• At least 50 employees at a single site of employment during a 30-day period, provided these 50 employees constitute at least one-third (33.3%) of the employer's active workforce at that site.

The purpose of the WARN Act is to give affected workers and their families time to adjust to the prospective loss of employment, seek new jobs, and, if necessary, obtain skills training.

Examples of a Mass Layoff:

• Example 1: Large-Scale Corporate Restructuring

  Scenario: "Global Tech Solutions," a major software company employing 3,000 people at its headquarters, announces a strategic shift away from its legacy hardware division. This decision leads to the elimination of 750 positions within that division, effective within a 30-day window.

  Explanation: This situation qualifies as a mass layoff under the WARN Act because Global Tech Solutions is laying off 750 employees, which significantly exceeds the threshold of 500 employees at a single site within a 30-day period. Therefore, the company would be legally required to provide its employees with 60 days' advance notice before these layoffs take effect.

• Example 2: Mid-Sized Manufacturing Plant Closure

  Scenario: "Midwest Textiles," a manufacturing plant with 150 full-time employees, faces severe economic challenges due to declining demand and increased import competition. The company decides to close its primary production line, resulting in the layoff of 60 workers.

  Explanation: Midwest Textiles' action constitutes a mass layoff because, while the number of laid-off employees (60) is less than 500, it meets the alternative criterion: 60 employees represent 40% of its 150-person workforce (which is more than one-third). Since the company has more than 100 full-time employees, it would be obligated to provide 60 days' notice under the WARN Act.