Mass layoffs at Twitter, Meta and other companies spotlight a little-known U.S. law that protects employees

ljubaphoto | E+ | Getty Images

Soon after Tesla and SpaceX CEO Elon Musk's acquisition of Twitter on Oct. 27, mass layoffs began. On the night of Nov. 3, hundreds of the company's employees were notified via email that they no longer worked there, though some have since been asked to come back, Bloomberg reports.

In the wake of the layoffs, five former or current Twitter employees filed a lawsuit against the company alleging it had violated workers' rights per the federal Worker Adjustment and Retraining Notification Act. That stipulates that workers must receive a 60-day notice prior to mass layoffs.

Musk recently weighed in on Twitter, saying, "Everyone exited was offered 3 months of severance, which is 50% more than legally required." Twitter representatives did not respond to CNBC Make It requests for comment.

And it's not the only tech giant cutting staff: Meta, parent company of Facebook, announced this week it would be laying off 11,000 employees as well.

It remains to be seen if the courts will find the Twitter layoffs violated employee rights. Meanwhile, it's helpful to understand this law and your own rights in the case of a mass layoff.

Here's what U.S. workers should know about the WARN Act, which covers all 50 states.

Companies must have 100 full-time employees

The federal WARN Act, which took effect in 1989, only covers workers who work for more sizeable employers.

The company doing layoffs must have 100 or more full-time employees, not including those who've been there less than 6 months and those who work less than 20 hours per week. It must also be a private, for-profit business; a private non-profit organization; a publicly traded company; or a "quasi-public" organization separate from the government.

There are two types of layoffs that fall under the jurisdiction of the act: a plant closing and a mass layoff.

Each has its own parameters. A plant closing, for example, happens when an employer shuts down an operating unit within a single site of employment, resulting in a layoff of at least 50 full-time employees. A mass layoff can occur when an employer lets go 500 or more full-time employees at a single employment site.

Companies must notify state employment agencies

Ultimately, "the purpose of the WARN Act is to provide a time period for workers where they're still being paid and are able to find new work because of the imminent closure," says Daniela Urban, executive director of the Center for Workers' Rights.

Workers must receive written notice (any type of written notice, email included) of the forthcoming layoff 60 days before it takes place, during which time they are still owed their regular pay and benefits. What layoff means in terms of whether or not they still have to come into work is a bit of a gray area, says Arick Fudali, partner at and managing attorney of civil rights firm the Bloom Firm.

Members of a union would be notified by their union as opposed to their employer, and the company must notify their workers' state employment agencies of their impending layoffs as well.

The WARN Act might look different in different states

Some states have their own WARN Acts with slight modifications.

California's WARN Act, for example, covers employers with 75 full-time employees, and New York's WARN Act covers private businesses of 50 or more full-time employees. In these instances, any additional stipulations to the federal WARN Act would apply, with workers being owed no less than what's federally mandated.

In the case of a violation, 'the employer is liable for back pay'

If an employer is found to have violated the federal WARN Act, "the employer is liable for back pay and benefits for the period of the violation," says Fudali.

Some states have steeper penalties. In California, an employer is "obligated to pay the aggrieved employee $500 a day for every day of the violation in addition to back pay and the cost of any medical expenses incurred by the employee that should have been covered under the benefits they lost in the layoff," he says.

There have been several instances of workers filing a suit against an employer alleging a violation of the WARN Act in recent history. In 2013, Maryland courts found that the Walt Disney World Co. violated the act when it closed one of its restaurants in 2010.

In June, former employees at Tesla filed a lawsuit against the company, alleging it had violated the WARN Act during layoffs. As of early November the case was in arbitration.

Check out:

5 U.S. employment laws every person entering the job market should know

64% of service sector workers report having unpredictable schedules—and it impacts more than pay

Half of employers are planning layoffs—here's how to negotiate your exit if it happens to you

Sign up now: Get smarter about your money and career with our weekly newsletter

How millennials have been affected by unemployment during coronavirus
How millennials have been affected by unemployment during coronavirus