What Small, Private Businesses Should Know About Temporary Layoffs

December 9, 2022

We’re a privately owned company with fewer than 100 employees. Do we have to follow the Worker Adjustment and Retraining Notification (WARN) Act regulations in the event we decide to conduct a temporary layoff soon?

You don’t need to follow the regulations from the federal WARN Act if your company has fewer than 100 employees. By definition, an employer under the federal WARN Act is a business that has 100 or more employees, excluding part-time employees. Therefore, if you have fewer than 100 employees, your company doesn’t qualify as an employer under the Act.

Some states have their own “mini-WARN” Acts, however. For example, Wisconsin’s mini-WARN Act applies to companies that have 50 or more employees when the business closes. It also applies if the closure of one location in one municipality involves at least 25 employees. So, if your company has more than 50 employees in Wisconsin, you must comply with Wisconsin’s mini-Warn Act requirements, in addition to any federal laws.

In the case of a mass layoff that doesn’t result in a business closure, Wisconsin’s law may apply to companies with as few as 25 employees, but only if the layoff involves at least 25% of its workforce or 25 employees (whichever is greater).

The Illinois mini-WARN Act applies to employers with at least 75 employees, but only if the layoff affects at least 50 of them. In the case of a mass layoff that doesn’t result in a business closure, Illinois’ law may apply to a company with as few as 25 employees if the layoff involves at least 33% of its workforce.

If you’re considering laying off more than a handful of employees or are laying off employees that are 40 years or older, you should consult with legal counsel, as these laws and other laws can be complex and have additional requirements for severance agreements depending on the specific circumstance.

This article, slightly modified to note recent updates, was featured online in the Wisconsin Employment Law Letter and published by BLR®—Business & Legal Resources. Reproduced here with the permission of BLR®—Business & Legal Resources.