What are WARN Act requirements?

The federal WARN Act requires most employers with 100+ employees to provide 60 days’ notice for mass layoffs or plant closures, but many states have their own “mini-WARN” acts with stricter rules.

For example, New York requires notice for employers with as few as 50 employees, and New Jersey requires severance pay in addition to notice. Other states, like California and Illinois, also have more stringent thresholds or broader definitions of “layoff.” Because the requirements differ significantly by jurisdiction, employers should always check their state’s Department of Labor website or consult with employment counsel before finalizing a layoff plan.

What are final paycheck rules after termination?

Final paycheck timing depends heavily on state law. Some states, like California, require that final wages (including accrued vacation) be paid immediately on the last day of employment if the employee is terminated. Others, such as Texas, allow payment by the next regular payday.

A handful of states have special rules for direct deposit, mailed checks, or electronic paycards. Employers must also ensure that all earned wages, bonuses, commissions, and overtime are included in the final paycheck to avoid wage-and-hour claims.

Do I have to pay out PTO after termination?

In states like California, accrued but unused paid time off (PTO) or vacation is treated as earned wages and must be paid out at termination. Other states, such as New York, defer to the employer’s written policies — if your handbook promises payout, you must follow it. Some states, like Florida, have no payout requirement unless the company has a policy stating otherwise.

Because PTO payout rules are highly state-specific, the safest approach is to review your state’s wage laws and ensure your policies are clear, consistent, and communicated to employees.

What are union layoff notice requirements?

If employees are covered by a collective bargaining agreement (CBA), the contract typically outlines the layoff process. Common requirements include advance notice, bargaining or consultation with the union, “bumping rights” (senior employees replacing junior ones), and recall rights if positions reopen.

Failure to follow the CBA can result in grievances, arbitration, or unfair labor practice claims. Employers should work closely with labor counsel and union representatives to ensure compliance with contractual obligations.

How do multi-location layoffs affect compliance?

Under the federal WARN Act, notice requirements are generally applied on a “single site of employment” basis, meaning each worksite is evaluated separately. However, some states take a broader view — aggregating layoffs across multiple locations under common ownership within the state.

For example, New Jersey’s mini-WARN applies statewide rather than just per site. Multi-location layoffs often trigger overlapping state and federal rules, so employers should conduct a detailed legal review before finalizing plans.

Who should deliver layoff notices—HR or managers?

Ideally, the process is collaborative. HR should draft and review layoff letters, confirm compliance with legal requirements, and be present during the meeting to answer benefit and policy questions. However, frontline managers — who have the closest working relationship with employees — are often the best people to deliver the news directly.

This approach balances legal accuracy with empathy, as employees tend to respond better when hearing difficult news from a familiar leader rather than an HR representative alone.

How do we choose employees for a layoff in a legally defensible way?

Use clear, job-related selection criteria that tie back to business needs (role redundancy, required skills, location changes, or objective performance history). Apply the criteria consistently across the affected group and document how decisions were made. Avoid informal reasoning or inconsistent exceptions. Have HR and legal review the criteria before finalizing the list.

What documentation should we keep to support layoff decisions?

Keep a record of the business reason for the reduction, the selection criteria, and the decision process. Save versioned layoff lists, approval notes, and any scoring or role-mapping used.

Document the communications plan and what materials were provided to employees. Good documentation helps prevent confusion internally and reduces risk if decisions are later questioned.

Should we run an adverse impact review before finalizing a layoff list?

Yes - this is a common compliance step to help identify potential unintended disparities across protected groups. It doesn’t automatically mean a problem exists, but it can surface risk early while changes are still possible. If the results raise concerns, involve counsel before making adjustments. The goal is to reduce legal exposure and improve fairness.

What is a separation agreement, and when should we use one?

A separation agreement is a written document that outlines exit terms and may include a release of claims. Employers often use them when offering severance or when they want clear, documented terms. Use consistent templates and review for role and jurisdiction differences. Have legal counsel review language before rollout.

What’s the difference between a layoff and a termination for cause (from a compliance standpoint)?

A layoff is typically business-driven (restructuring, budget cuts, role elimination), while termination for cause is tied to conduct or performance.

The compliance risk is different because the documentation and messaging must match the real reason. Mixing terms or implying cause in a layoff situation creates confusion and potential claims. Keep your internal records, letters, and manager talking points aligned.

What compliance steps are easy to miss during layoffs?

Common misses include inconsistent documentation, unclear manager messaging, incomplete benefits/offboarding notices, and poor coordination between HR, payroll, and IT. Another frequent gap is not standardizing how exceptions are handled. A checklist helps, but you still need owners and deadlines for each step. Treat it like a project plan, not a one-time meeting.

What should we say (and avoid saying) in layoff communications to reduce risk?

Use simple, factual language tied to business needs and avoid commentary about the employee’s performance unless that’s truly the reason. Don’t make promises you can’t control (rehire timing, guaranteed outcomes, “this won’t affect anyone else”).

Avoid comparisons between employees or discussing how the list was built in detail. Give clear next steps and one channel for questions.

How should HR handle rehire eligibility and references after a layoff?

Set a consistent internal policy for rehire eligibility so managers don’t improvise. If you anticipate rehiring, define how employees can be notified and what “priority consideration” (if any) actually means. For references, align on what your company will confirm and who responds. Consistency across employees reduces perceived unfairness.

What compliance considerations apply when layoffs include remote employees?

Remote employees can introduce location-based requirements even if the company headquarters is elsewhere. HR should confirm which state rules apply based on the employee’s work location and payroll records. Plan equipment return, access shutoff timing, and documentation delivery in advance.

Remote layoffs often fail due to logistics, not intent—so build a clear checklist for the “last week” process.

How do we coordinate HR, legal, payroll, and IT so the layoff process stays compliant?

Assign a single owner for the overall timeline and a named owner for each workstream (letters, pay, benefits, access, property, communications). Use one source of truth for dates and employee lists to prevent mismatches. Schedule a final “go/no-go” review so the letter language, payroll timing, and system access plan align. Most compliance mistakes happen when teams operate from different assumptions.