Earlier this month, our team published an in-depth article for federal contractors on navigating WARN Act compliance amid government shutdowns and federal contract cancellations. Since then, we’ve been closely monitoring the broader wave of workforce reductions affecting not only government contractors but employers across industries and company sizes.
October brought a noticeable uptick in news headlines about layoffs and reductions in force (RIFs) across a variety of industries, from tech giants and Fortune 500 companies to mid-sized and middle-market businesses. While corporate positions at large companies dominated the headlines, many RIFs also occurred in the middle market. Much of this increase is likely tied to annual budgeting cycles, as businesses look ahead to 2026 and reassess cost structures amid economic uncertainty and evolving market conditions.
Before initiating a RIF, employers must understand the legal landscape that governs these actions.
BeWARNed of the WARN Act Basics
The primary federal law governing RIFs is the Worker Adjustment and Retraining Notification (WARN) Act. The federal WARN Act requires employers with 100 or more full-time employees to provide at least 60 days’ written notice before a mass layoff or plant closing. This law is designed to give workers time to prepare for employment transitions.
A WARN notice is generally required if during a 30-day period:
- The layoff affects 500 or more workers, or
- 50 or more employees are laid off and that number is at least 33% of the employer’s active workforce at a single location.
Certain employees—such as part-time workers, recent hires, or those offered transfers—may not count toward these thresholds.
When WARN Does Not Apply
Not every layoff triggers WARN requirements. For example, if fewer than 50 employees are affected, the layoff lasts less than six months, or the business was always intended to be temporary, the law may not apply. There are also exceptions for unforeseeable business circumstances, faltering companies seeking new financing, and natural disasters, though notice must still be given as soon as possible.
State “Mini-WARN” Laws: More Protection, More Complexity
Beyond federal law, many states have their own “Mini-WARN” Acts. These often have stricter requirements, covering smaller businesses, and mandating longer notice periods or even severance pay. For example:
- California and Illinois: Layoff notice is required for businesses with 75 or more employees.
- New York: Notice is required for layoffs affecting as few as 25 employees at a single site of employment if that is at least 33% of the workforce, and 90 days’ notice is required (versus 60 days under federal law).
- New Jersey and Maine: Employers must provide severance pay in addition to notice.
- Maryland: Civil penalties for noncompliance can reach up to $10,000 per day.
Employers must consult both federal and state laws before proceeding with layoffs to ensure full compliance, as state laws may impose additional and more stringent requirements.
Special Rules for Older Workers
If a RIF affects employees aged 40 or older, special rules under the Age Discrimination in Employment Act (ADEA) and the Older Workers Benefit Protection Act (OWBPA) apply. To obtain a valid waiver of claims (often included in severance agreements), employers must:
- Give affected employees at least 45 days to consider the agreement;
- Allow a seven-day period to revoke their acceptance even after signing; and
- Provide specific information about who is being laid off and why (the “decisional unit” disclosure).
New Approaches: AI-Related Layoffs
As in many sectors of business functions, Artificial Intelligence (AI) has made its way in and has started to impact how companies operate – including in assisting in the layoff process. In March 2025, New York became the first state to require employers to disclose if layoffs are related to AI. This highlights a growing trend of states expanding protections in response to new workplace realities.
Conclusion
Navigating a reduction in force is never easy, but staying informed about legal obligations can help protect your business during challenging times. As the economy continues to shift and new regulations emerge, taking the time to plan thoughtfully and communicate clearly can help your organization move forward with confidence and integrity.
As workforce reductions become more frequent and the legal landscape grows increasingly complex, it’s critical to ensure your organization is fully compliant and prepared. Even a well-intentioned RIF can expose your business to significant legal and financial risks if not handled properly. Our experienced team can help you navigate federal and state requirements, minimize liability, and protect your organization’s reputation.
If you are contemplating a reduction in force or have questions about your obligations, reach out to Kevin Koronka, Courtney Steelman, Amanda Ellis, or your Husch Blackwell attorney.