When an employer terminates someone’s job, whether it is for a temporary or permanent period, it is referred to as a layoff. In some cases, a large number of employees may lose their jobs simultaneously, which is known as a mass layoff. To ensure that employees have time to prepare for job loss and seek alternative employment, the Worker Adjustment and Retraining Notification Act mandates that employers provide advance notice if they intend to lay off a significant number of individuals.
A layoff is when an employer terminates the employment of many employees at once, either temporarily or permanently. It can also be called a reduction in force. For example, a company may lay off a large number of employees due to financial difficulties or restructuring, resulting in those employees losing their jobs with the company. The Worker Adjustment and Retraining Notification Act is a federal law that mandates employers to provide notice of a plant closing or mass layoff at least 60 days in advance. This notice must be given to the employees, the state-dislocated-workers unit, and the chief elected official of the local government where the layoff will occur. If a factory is closing down and 500 or more full-time employees will be jobless, the employer must comply with this law and provide notice. These examples demonstrate the concept of a layoff and the legal requirements associated with it.
A layoff is a temporary or permanent termination of employment due to a lack of work or financial constraints.
In most cases, an employer must provide notice of a layoff, unless the employee is terminated for cause or the employment contract allows for immediate termination.
There is no legal requirement for an employer to pay severance during a layoff, but it may be included in an employment contract or collective bargaining agreement.
An employee on leave may be subject to layoff if the layoff is not related to the leave and the employee is not protected by a collective bargaining agreement or employment contract.
No, an employer cannot lay off an employee based on protected characteristics such as age, race, or gender. Doing so would be considered discrimination and is illegal.
Yes, an employee who is laid off may be eligible for unemployment benefits, depending on the state’s eligibility requirements.
Yes, an employer may recall employees after a layoff if work becomes available and the employee is qualified for the position.
An employee may be able to sue for wrongful termination during a layoff if the layoff was discriminatory or violated an employment contract or collective bargaining agreement.
An employer may lay off an employee who is on a fixed-term contract if the contract allows for termination due to a lack of work or financial constraints.
An employer may lay off an employee who is on probation if the layoff is not related to the employee’s performance during the probationary period.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 16th April 2024.
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