Human Resource Blog

Layoff Notification Period in Missouri

Our Missouri company recently lost our largest account because our client actually went out of business. Unfortunately, because we lost the account, we are going to have to lay off some of our employees. We cannot afford to keep them on for more than a few weeks, but we understand that there is a law stating that we need to give them more notice. Are there any other options for us?

That law that you are referring to is most likely called the Worker Adjustment and Retraining Notification Act (WARN). This is a federal Act that applies to businesses across the country that qualify. You are right about this Act requiring some employers to give their employees at least 60 days of notice before the employees are laid off. However, there are some exceptions to the law. Fortunately for you, losing business through unforeseen circumstances, such as the loss of a major account, is one of the exceptions.

Keep in mind that if your company were laying off people for other reasons, your company and the layoffs would still need to first qualify for coverage under WARN in order to be subject to the notification requirements. In order to qualify, you would either have to lay off at least 50 employees and you would have to have 100 or more employees to begin with, as long as those 100 or more employees did not consist of part-time employees.

There are three exceptions to the 60 days of notice period that WARN requires for those businesses that are covered:

1. If your company is faltering and results in a plant closing, then you do not need to provide 60 days of notice. However, you do need to prove that you were actively searching for capital and/or business solutions that would have helped the company at the time that you closed the company. You also need to be able to prove that if you had actually provided your workers with 60 days of notice, that notification could have resulted in the loss of new business (for example, if a business heard about the layoffs, they might not choose to do business with your company.
2. You do not have to provide 60 days of notice if your company is faltering (this is the exception that applies to your company.) When you have sudden or unexpected business circumstances that lead to a dramatic change in the business, then the employer does not have to provide 60 days of notice to the employees. Losing a major account is actually quite common and is, therefore, an exemption from the WARN notice laws.
3. You also do not have to provide 60 days of notice if your business suffers as a result of a natural disaster. For example, if you have mass layoffs or plant closings as a direct result of a natural disaster, you are exempt from having to provide 60 days of notice to your employees that are losing their jobs.  CB