Soon after billionaire Elon Musk finalized his purchase of Twitter, media reports said Twitter planned to lay off 3,700 employees, equivalent to half of its 7,400-employee workforce nationwide. On Nov. 3, five former Twitter employees filed a class-action lawsuit against the company alleging it had violated state and federal labor law.
Viral threads on Twitter and Reddit specifically cited the WARN Act, and claimed that the ongoing layoffs violate the law’s requirement that large companies give employees 60 days’ notice before mass layoffs.
While courts will determine if Twitter violated labor laws as the suit alleges, many commenters on the various threads said they weren’t given such notices before being laid-off in their own previous jobs, and therefore doubted such a federal law exists.
THE QUESTION
Does federal law require large companies like Twitter to give employees 60 days’ notice before mass layoffs?
THE SOURCES
THE ANSWER
Yes, federal law requires large companies like Twitter to give 60 days’ notice before mass layoffs.
WHAT WE FOUND
Both the federal government and the state of California have their own version of what’s called the Worker Adjustment and Retraining Notification (WARN) Act, a law that requires certain employers to give employees notice before mass layoffs or plant closings.
The federal WARN Act requires certain companies to give employees 60 days’ notice if they are to be laid off as part of what the law defines as a “mass layoff,” or as a result of a facility’s closing.
A company is subject to the federal law if they have 100 or more employees. If some of those employees are part-time, then an employer is only subject to the WARN Act if their employees work a total number of weekly hours equivalent to the hours 100 full-time employees would work. Employees must have worked for the company at least six months out of the past year to qualify under the WARN Act.
For a mass layoff to qualify for the federal WARN Act, at least one of two conditions must be met over a 30-day period: the layoff impacts at least 50 employees and 33% of the company’s workforce, or the layoff impacts at least 500 employees.
Twitter has 7,400 employees and the company is reportedly laying off 3,700 employees.
The WARN Act also kicks in when 50 or more employees are laid off because of the shutdown of a facility within the company or the entirety of a single site of employment.
In any of these situations, an employer must notify any employee affected, their representatives, local officials and state agencies at least 60 calendar days ahead of when they’re supposed to be laid off. If the layoff is happening because of a company’s sale, employees still must receive 60 days’ notice before they’re laid off, and it is the buyer’s responsibility to make sure the employees receive that notice, even if the seller agrees to give the employees the notice for the buyer.
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California’s WARN Act is similar to the federal law in that it requires companies to give employees 60 days’ notice before mass layoffs, but it applies to a broader set of companies with an expanded definition of what constitutes a “mass layoff.” Companies with 75 or more full-time and part-time employees must comply with the state’s WARN Act, and the layoff must affect 50 or more employees, regardless of the percent of the company’s workforce those employees make up.
The State of California’s Employment Development Department says that the federal WARN Act makes companies liable for back pay and benefits for the period in which it violated the act, but California’s WARN Act also makes companies in violation liable for the cost of any medical expenses incurred by employees that would have been covered under an employee benefit plan. California’s WARN Act also penalizes companies $500 a day for each day in which they violate the act.
California, like all states except for Montana, has “at-will” relationships between employees and employers, the National Conference of State Legislatures (NCSL) says, which means employers can terminate employment for any reason or no reason at all, so long as the reason for termination isn’t illegal.
But the federal WARN Act is designed so that employers still must give notice for mass layoffs, even at companies where employee contracts are at-will. The WARN Act defines “employment loss” in this case as termination of employment “other than a discharge for cause, voluntary departure, or retirement.”
That means a company must give a reason for an employee’s termination if it wants to argue it fired employees instead of laying them off.
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