Editor's Note
Layoffs, Location & Law
WARN laws require significant notice (60-90 days) to employees and local government before a major layoff. There's a federal law and about a dozen state laws that are all a little different.
The differences usually relate to how many employees are involved, where the employees or the "work site" is located, the notice period that's required, and what constitutes a "layoff" when there is a merger or something else going on too.
For wage and hour law, the law where the employee sits usually applies. That means final paycheck rules can be different depending on the state the employee is in. But some laws recognize that employers have remote workers which can expand the reach of the requirements. The case below involves whether a California employee who was laid off by a New York company can sue for lack of required notice under the New York WARN Act.
It's a common issue in WARN cases. How do you count employees at a "work site" when many or most of them are remote. Do remote employees who report to a specific office legally work at that office even if they never actually go there?
In WARN cases, the apparent solution is just to give the notice. But layoffs are complicated because the minute you tell people they are going to be laid off in 90 days, work is no longer a priority; finding a job is. You can't blame them. But it's management chaos.
Sometimes, employers decide to just pay wages and benefits for the notice period as severance, which is a reasonable approach because employees get the practical benefits of notice—pay and benefits—and they don't have to work while they're job hunting. And the employer can notify people when they want because they are already paying the penalty for not giving notice. But this may not work in your jurisdiction. Always get legal advice before a layoff.
Law is based on people, places, and things. Work is often digital, which is none of those. This reality continues to create stress for everyone. Meanwhile, we're making digital agents who are doing stuff that can cause liability for employers. So, it's only going to get weirder from here.
- Heather Bussing
The media companies Paramount Global and CBS Interactive, Inc., are facing a class-action lawsuit in federal court over recent layoffs, which allegedly occurred without the proper warning. The outcome of the case may shed light on when remote workers who live out of state can have standing to sue under state laws requiring advance notice before a mass layoff.
Quick Hits
- Employees sued Paramount Global and CBS Interactive after mass layoffs in New York in 2024.
- Employees claim the companies did not provide ninety days’ notice under New York’s Worker Adjustment and Retraining Notification (WARN) Act. But the companies argue they fulfilled their legal duty because the workers stayed on payroll and benefits for ninety days.
- Some of the laid-off employees worked remotely in other states, and the parties disagree as to whether remote workers may sue under the New York WARN Act.
On September 24, 2024, about 350 employees, mostly based in New York City, were notified that their last day of work would be September 30, 2024. The separation agreement stated the employees would remain on the payroll and continue to participate in benefit plans in until November 25, 2024, regardless of whether they signed the separation agreement.
On October 3, 2024, employees brought a class-action lawsuit against Paramount Global and CBS Interactive Inc., alleging a violation of New York’s WARN Act for not giving the requisite ninety days’ notice before a mass layoff.
One of the named plaintiffs worked remotely from his home in Orange County, California, and reported to headquarters in New York City. The employers argued he did not meet the requirements to sue as an “affected employee” under the New York WARN Act.
On January 31, 2025, the plaintiffs filed a memo in opposition to the employers’ earlier motion to dismiss the class action.
New York Law
New York’s WARN Act covers employers with fifty or more full-time employees, including remote workers. Under the state law, a “mass layoff” means a reduction in force that results in employment loss for at least 250 full-time workers at one worksite, regardless of the total number at the worksite, or employment loss for at least twenty-five full-time employees constituting at least 33 percent of the total full-time employees at the worksite.
If an employer fails to provide an employee ninety days’ advanced notice before a mass layoff, the employer must pay that employee the equivalent of sixty days of wages and fringe benefits, such as insurance coverage, retirement plan contributions, and accrued vacation days.
Meanwhile, the federal Worker Adjustment and Retraining Notification (WARN) Act requires employers with more than one hundred workers to provide sixty days’ notice before a mass layoff or plant closing.
Paramount Global and CBS Interactive argued that the New York and federal laws do not require employers to keep employees actively working during the notice period. The companies noted the laid-off workers received their full pay and benefits for ninety days after receiving notice of the layoffs, regardless of whether they signed the separation agreement.
Next Steps
It’s unclear what the court will ultimately decide in this case, but the ruling could help to guide employers in how to address remote workers during layoffs.
At least thirteen states have state-level versions of the WARN Act. Before proceeding with large-scale reductions in force, multistate employers may wish to update employees’ locations to ensure they are accurate. Employers also may wish to carefully plan the timing and wording of layoff notices to give adequate warning and comply with federal and state laws.
