Are there federal or state laws that affect downsizing?
In severe downsizing situations, such as a nonprofit closing its doors, the federal WARN Act (Worker Adjustment and Retraining Notification Act) or a similar state law may apply. WARN only applies to those nonprofits with 100 or more full- or part-time employees, who, in aggregate, work at least 4,000 hours per week. WARN requires employers to give employees 60 days advance notice when 50 or more employees will be terminated, if that constitutes 1/3 of the workforce (or when 500 or more employees will be laid off). Beware of state laws: • Connecticut and Maine have their own state WARN Acts affecting workplaces with 100 employees; • in Hawaii, Maryland, Massachusetts, Tennessee and Wisconsin the trigger is 50 employees; • the Michigan plant closing law affects workplaces with 25 or more employees; and • in Minnesota, a nonprofit must immediately notify employees in writing when a petition for bankruptcy is filed.
