Maryland Layoff Laws

Employees In Maryland have certain rights when their employer conducts a mass layoff, closes a facility, or otherwise cuts a significant number of jobs. Employees don't have a legal entitlement to keep their jobs or to be considered for rehire, however. Employers are free to shape their workforces as they see fit by downsizing, relocating, or otherwise responding to shifting economic incentives.

However, employees do have the right to a certain amount of notice before a plant closing or large-scale layoff. If the employer fails to give proper notice, employees are entitled to damages. These rights come from the federal Worker Adjustment and Retraining Notification (WARN).

Almost half of the states have similar laws; a few go further to require employers to provide some severance or continued benefits to workers who will lose their jobs. Maryland has its own layoff law, but it takes a different approach: It is voluntary for employers. Notice, severance, and benefits continuation are all encouraged, but not legally required.

This article provides information on the rights of Maryland employees under the federal WARN Act and Maryland law. For more information on your rights when you are laid off (including when you should receive your final paycheck and how to continue your health benefits), see the articles at our Losing or Leaving Your Job page.

Covered Employers

The coverage rules under federal and state law differ.

Employers Covered by WARN

Under the federal WARN Act, certain larger employers to give advance notice of mass layoffs or plant closings that will result in a certain number or percentage of employees losing their jobs. Employers are covered only if they have at least 100 full-time employees or at least 100 employees who work a combined 4,000 hours or more per week. (Full-time employees are defined as those who work at least 20 hours a week and have been employed for at least six of the 12 months ending on the date when notice must be given under WARN.)

Employers Covered by Maryland Law

Under Maryland law, employers are covered if they have been in business for at least one year and have at least 50 employees.

Covered Layoffs

Not every layoff or plant closing is covered by federal or state law.

Federal WARN Act

WARN applies only to plant closings and mass layoffs.

• A mass layoff is a reduction in force resulting in job loss at a single site of employment for 500 or more full-time employees, or for 50 to 499 full-time employees, if the number of employees laid off makes up at least 33% of the employer's active workforce.
• A plant closing is the shutdown of a single site of employment, or at least one facility or operating unit within a single site of employment, which results in job loss for 50 or more full-time employees during any 30-day period. A single site of employment is simply one geographical location of an employer's operations, such as a building, an office suite, or a group of buildings that form a campus or industrial park. Even work areas that are physically separate can be a single employment site if they are reasonably close together, used for the same purpose, and share the same staff and equipment.

WARN also applies to plant closings or mass layoffs that occur in stages over 90 days. This rule is intended to prevent employers from getting around WARN's notice requirements by conducting a series of smaller layoffs over time.

Maryland Law

Maryland's plant closing law applies whenever a covered employer shuts down a workplace or a portion of operations, resulting in layoffs of at least 25% of the workforce or 15 employees, whichever is greater, over any three-month period.

Notice to Employees

Both WARN and Maryland law include notice requirements. However, notice is mandatory under WARN, and voluntary under Maryland law.

Required Notice Under WARN

If a layoff or plant closing is covered by WARN, employees who will lose their jobs are entitled to notice 60 days in advance. (Employees who are union members need not receive individual notice; instead, the employer must notify their bargaining reps, who are expected to pass the information along to the affected employees.)

The notice must provide specified information about the planned layoffs, including whether they are expected to be temporary or permanent, the expected date when the layoffs will begin and when the employee will receive a termination letter, and whether the employee will have bumping rights.

In some situations, an employer either does not have to give notice at all or can give less than 60 days' notice. No notice is required if the employer is laying of temporary or seasonal employees, or the layoffs are the result of temporary projects that are completed, as long as the employees knew when hired that the jobs were for a limited time. WARN also doesn't apply to job losses occasioned by strikes or lockouts.

An employer can give less than 60 days notice if one of these exceptions applies (the employer must still give as much notice as possible and explain why it couldn't give the full 60 days that would otherwise be required):

• Unforeseeable business circumstances. If the business circumstances leading to the plant closing or layoff were not reasonably foreseeable when the employer should have given 60 days' notice, a shorter notice period is allowed.
• Faltering company. If a company is struggling financially when it should have given 60 days' notice, it can give a shorter period of notice. However, the company must show that it was actively seeking business or money that would have allowed it to postpone or avoid the plant closing altogether, and that it reasonably believed, in good faith, that giving 60 days' notice would have precluded it from obtaining the necessary business or money. This exception applies only to plant closings, not mass layoffs.
• Natural disasters. If the layoff or plant closing results from a natural disaster, the employer is allowed to give less than 60 days' notice.

Voluntary Notice (and Benefits) Under Maryland Law

Maryland encourages, but does not require, employers to give advance notice of job losses covered by the state's law. Maryland provides that employers "should" give 90 days' notice whenever possible. The state's notice law includes exceptions for bankruptcy, job losses occasioned by seasonal factors common to the industry, labor disputes, or the closure of a construction site or temporary workplace. However, because the notice law is voluntary, an employer is free to conduct layoffs without notice, even if no exception applies.

Employers are also encouraged to follow the state's voluntary guidelines for compensation and benefits continuation. Maryland's administrative code encourages employers to consider:

• continuing employee health care coverage for six months
• giving employees a retraining allowance of up to $1,800
• providing severance pay tied to the employee's wage level, length of employment, or both, and
• job search assistance.

Again, remember that these are only suggested guidelines; employers are not legally required to offer any of these benefits.

If Your Rights Have Been Violated

If you believe your rights have been violated, you should consult with an experienced Maryland employment lawyer. WARN includes the right to attorney fees if you win, so it provides an incentive for lawyers to take strong cases. However, the damages available to any one employee are relatively low. Therefore, a lawyer may advise either trying to negotiate a settlement or going forward on behalf of all affected employees, as part of a class action lawsuit.