Are you looking to layoff employees in the Lone Star State? You will need to make sure that you are compliant with the WARN (Workers Adjustment and Retraining) Act and other regulations within your area in Texas.To make sure that you are compliant, you will need to understand multiple areas of these laws. First, let’s break down the different parts of the WARN Act that you will need to understand when laying off employees in Texas:
1. You first need to understand if your layoff event is covered by the WARN Act
2. How to be compliant with the WARN Act requirements in Texas
Now, let’s get started with understanding if your layoff event is covered by the WARN Act:
WARN Act Qualifications in Texas
The WARN Act has several regulations that shape who the law should be applied to. It states:
- The WARN Act applies to your organization if you have over 100 full-time employees
- The WARN Act applies to all publicly and privately held companies
- The WARN Act applies to all organizations that are for profit or not for profit
- A WARN notice must be given if there is a plant closing or a mass layoff
So, if you are an organization that has less than 100 full-time employees (FTEs), you do not have to comply with the WARN Act. If you have over 100 full time employees, the WARN Act will apply to you regardless of being public or private, for-profit or not-for-profit.
Those regulations are fairly simple to understand. The last one: “A WARN notice must be given if there is a plant closing or a mass layoff”, is a little bit more complicated because of the ambiguity of a “mass layoff” or “plant closing”.
According to LexisNexis, a plant closing is:
“If one or more facilities or operating units in a given location anticipate a shutdown that will affect more than 50 workers AND last more than 30 days.”
And a mass layoff is:
“If a series of layoffs over a 30 day period will result in the loss of 500 or more employees, WARN Act Notice must be given. Also, if a series of layoffs of more than 50 or less than 500 employees over a 30 day period will result in a loss of 1/3rd of the workforce, WARN notice must be given.”
You can read more about these qualifications in our blog “When and How Does the WARN Act Apply To Your Organization?”
Now, let’s run through a couple of examples:
1. A manufacturing company in Houston, Texas has 75 employees. The organization is laying off over half of its employees due to the loss of a business contract.
Since the company has less than 100 employee, it does not have to give a WARN notice.
2. A non-profit organization with over 500 employees will be closing down an office in Dallas, resulting in 134 employees being permanently laid off.
Since the company has more than 100 employees, and the facility that is closing will affect more than 50 employees for more than 30 days, giving a WARN notice is required.
Makes sense, right?
Now let’s dig into how Texas companies should comply with the WARN Act if their reduction event qualifies:
How To Comply With The WARN Act in Texas
To comply with the WARN Act, you will need to let your affected employees know 60 days in advance of their last day with the organization. This can be done through several different delivery methods, as long as it is given in writing. The United States Department of Labor states that any reasonable method of delivery is applicable. However, according to the United States Department of Labor:
“Use of preprinted notices that are regularly included in employees' paychecks or pay envelopes are not acceptable and do not meet the WARN Act requirements.”
This means that if your organization regularly gives out notices about the workplace with your paychecks, providing a WARN notice this way isn’t sufficient. This is because your employees might not notice the notice since they are regularly given notices through this delivery method.
When creating your WARN notice to be given to employees, make sure to include the following items:
- Notify notice receivers of the upcoming reduction in force
- Explain whether this layoff will be permanent or if the workers can expect to be called to work again
- A time-frame of when layoffs will occur and when their position will be affected
- Your organization’s policy on bumping rights
- Severance benefits that your organization will provide
- Who the employees should contact for further information at your organization (usually an HR representative)
To comply with the WARN Act, your organization must also provide a notice to your government about your reduction event. Similar to the notice given to employees, this notice must be given 60 days in advance.
According to the US Department of Labor, “The employer must also provide notice to the State dislocated worker unit and to the chief elected official of the unit of local government in which the employment site is located.”
For information on who to notify in Texas of your layoff event, visit the Texas Workforce Commission website.
Texas Laws Impacting Your Layoffs
Unlike other states, Texas does not have any specific laws about conducting layoffs. (Other than the federal requirements specified in the WARN Act.)
This means that if your organization, and all of your employees that are being laid off are located in San Antonio (or any city in Texas), you would only need to comply with the federal WARN Act.
However, in today’s technology connected world there is a chance that you have multiple employees located across many states. If you plan to lay off employees in multiple locations, it is best to research the individual state laws of each location. Even if the majority of your employees, or your headquarters, are located within Texas.
In these cases, it makes sense to find the most restrictive state laws of all of the states where you will be giving layoff notices, and follow those regulations for everyone.
For example, let’s take a look at a company called ALEYCO that is headquartered in El Paso, Texas with 6,000 employees. If your organization needed to layoff 500 employees, you would need to comply with the WARN Act. Then you would need to find the location of the 500 employees that you would be laying off. For example’s sake, let’s say that 400 employees are located in Texas, 80 are located in New Mexico, and the rest are either in California or work remotely in New York.
According to the Employment Law Handbook, New Mexico is similar to Texas in that there are no state regulations that organizations have to follow besides the WARN Act. However, both California and New York have extra state regulations that must be complied with.
Here is California’s state regulations:
“Applies to employers with 75 or more full or part-time employees where 50 or more employees are to be laid off due to a plant closing, mass layoff, or relocation of the employer's business. Unlike the federal law, there is no requirement that the number of employees to be laid off constitute a certain percentage of the employer's workforce. Relocation is defined as a move to a different location more than 100 miles from the prior location.”
And here is New York’s:
“Applies to private employers with 50 or more workers who layoff at least 25 employees.”
Based on the information we already know about the amount of employees being laid off, and the laws that both of these states have in place, we know that ALEYCO is compliant with all regulations.
Also, while there might not be any state regulations in Texas to dictate how layoffs must be structured, it is worthwhile to note that your organization might qualify for special programs to help organizations with reductions.
According to BLR, the Texas Shared Work program helps organizations and employees by supplementing lost wages due to reduced work hours with unemployment compensation.
Always consult with your corporate counsel before executing a layoff event, and when researching laws regarding layoffs in your location.