Companies like Google, Amazon and Chicago-based McDonald's have all recently announced layoffs, but in Illinois, there are certain requirements for companies planning to do so. It's all under the state's WARN Act.
Though the U.S. labor market remains strong, layoffs have been mounting, mainly in the technology sector, where many companies over-hired after a pandemic boom. IBM, Microsoft, Amazon, Salesforce, Facebook parent Meta, Twitter and DoorDash have all announced layoffs in recent months.
Not all layoffs must be reported in Illinois, but in many cases, there are guidelines companies must follow -- and employees will want to know about them.
According to the Illinois Department of Commerce and Economic Opportunity, "under state law, employers must notify the state when they plan to lay off workers." That law is known as the Illinois Worker Adjustment and Retraining Notification Act, also called the WARN Act.
The law was first passed in 1988 in an effort to "provide workers with sufficient time to prepare for the transition between the jobs they currently hold and new jobs."
Under the Illinois law, employers with 75 or more full-time employees are required to give workers 60 days advance notice for a plant closure or mass layoff, which is defined as:
- 25 or more full-time employees are laid off, and they constitute one-third or more of the full-time employees at the site, or
- 250 or more full-time employees are laid off at a single site.
A plant closure is defined as the "closure of a site that employs 50 or more employees."
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"A WARN notice is required when a business with 100 or more full-time workers (not counting workers who have less than six months on the job and workers who work fewer than 20 hours per week) is laying off at least 50 people at
a single site of employment, or employs 100 or more workers who work at least a combined 4,000 hours per week, and is a private for-profit business, private non-profit organization, or quasi-public entity separately organized from regular government," according to Department of Commerce and Economic Opportunity.
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The WARN Act was most recently in headlines after state labor officials announced an investigation into an Illinois-based pharmaceutical company that abruptly closed all of its operations, including its out-of-state locations in New Jersey, New York and Switzerland, and laid off hundreds of workers with almost no warning.
Akorn Operating Co., which is based in the northeastern Illinois city of Gurnee, told its 400 workers last month that it planned to file for bankruptcy and they would be laid off within 24 hours, the Chicago Tribune reported. CEO Douglas Boothe told employees in a video that the company's leaders decided on the move after failing to find a buyer for the company.
“I realize this is a tremendous shock and it will take time to absorb the news and what it means to you, your colleagues and your families,” Boothe said in the video, which was first obtained by the Decatur Herald & Review.
A spokesperson for the Illinois Department of Labor said the agency is investigating the situation because Akorn didn’t file the required 60-day notice of mass layoffs or plant closures.
Boothe said in his video that the company notified the U.S. Food and Drug Administration of the closure.
CNBC, citing outplacement firm Challenger, Gray & Christmas, reported Thursday that companies announced nearly 90,000 layoffs in March, a sharp step up from the previous month and a giant acceleration from a year ago.
Layoff announcements were made by several major companies in recent weeks, including McDonald’s, which reportedly closed its U.S. offices for a few days last week as the company prepared to inform employees about layoffs.
The Wall Street Journal cited an internal email from the Chicago-based fast-food giant saying U.S. corporate staff and some employees overseas should work from home while the company notifies people of their job status.
McDonald’s did not immediately reply to emailed requests for comment. The report said McDonald’s planned to inform its employees last week about staffing decisions that are part of a wide restructuring of the company announced earlier.
Meanwhile, Amazon is laying off roughly 100 employees across its video games division, an executive overseeing the unit wrote in a memo to staffers on Tuesday.
