Run a layoff in United States, the right way.
Answer a few questions and the toolkit builds your layoff compliance pack — WARN notice, a valid release, non-discriminatory selection and correct state final pay. There is no statutory severance in the US.
United States — WARN/mini-WARN notice, OWBPA releases & state final pay. No statutory severance. A layoff or RIF, not a redundancy.
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Doing a layoff or RIF the right way — for US employers
In the United States there is no legally required severance and employment is at-will (except Montana) — a layoff or reduction in force (RIF) is not about paying a set formula. What matters is doing it legally: giving the right WARN or mini-WARN notice, using a valid release if you offer severance, selecting people on non-discriminatory grounds, and paying final wages correctly for your state. This free AI toolkit walks you through a compliant layoff for your exact situation and builds the compliance pack — the notices, records and figures — that shows you followed the process.
The layoff/RIF process, step by step
- Business case — record the operational reason the role is no longer needed (about the position, not the person): a closure, restructure, lost contract or cost reduction.
- Coverage — your state and your head count decide whether federal WARN or a state mini-WARN applies. Ask two more questions: is anyone affected aged 40 or over? Are you offering severance in exchange for a release of claims?
- Selection — set legitimate, documented, non-discriminatory selection criteria. Watch for disparate impact — especially age — across the group you are cutting.
- Decision — decide against the criteria, and keep the record of how each person was scored.
- WARN / mini-WARN notice — if a threshold is met, give the required written notice before any separation takes effect.
- Final pay & release — pay final wages on your state’s timeline (some immediate, most by the next payday), pay out any accrued PTO where the state requires it, and — if you offer severance for a release and anyone is 40+ — use an OWBPA-compliant release.
Is severance required in the US?
No. There is no federal statutory severance, and employment is at-will (except Montana). Severance is optional unless a contract, employee handbook or policy, or a collective bargaining agreement promises it. Employers commonly offer severance anyway — but they do so to obtain a signed release of claims, not because the law sets an amount.
The one exception is New Jersey: its mini-WARN law requires severance of one week’s pay per full year of service on a covered mass layoff. No other state mandates a severance amount.
Never assume a severance entitlement. In the US it comes from an agreement — a contract, a policy or a union agreement — not from the law (with New Jersey’s covered mass layoffs the sole statutory exception).
WARN Act (federal)
The federal WARN Act covers employers with 100 or more employees. It is triggered by a plant closing (50+ employees losing their jobs at a single site) or a mass layoff (500+ employees, or 50–499 where they make up 33% or more of the site’s workforce) within a 30-day window. When triggered, you must give 60 calendar days’ written notice to the affected employees or their representatives, the state’s dislocated-worker unit, and the chief local elected official.
Penalties for failing to give notice are back pay and benefits for each day of violation, up to60 days, plus a civil penalty of up to $500 per day. Three narrow exceptions — a faltering company, unforeseeable business circumstances, or a natural disaster — can shorten the notice, but they do not remove the duty to give as much notice as is practicable.
WARN is enforced by private lawsuit in federal court — there is no agency that files the case for the employees, so a defective notice surfaces as litigation.
State mini-WARN + OWBPA release
Several states are stricter than federal WARN, with lower head-count and trigger thresholds and longer notice — so always check your own state:
| State | Coverage / trigger | Notice / severance |
|---|---|---|
| California | 75+ employees; 50+ affected in 30 days | 60 days’ notice |
| New York | 50+ employees; trigger as low as 25 | 90 days’ notice |
| New Jersey | 100+ employees | 90 days’ notice + 1 week/yr severance |
| Illinois | 75+ employees; 25+ trigger | 60 days’ notice |
OWBPA (Older Workers Benefit Protection Act) — if you offer severance in exchange for a release of claims and any affected worker is 40 or over, the release must be written in plain language, expressly reference the employee’s ADEA rights, give at least 21 days to consider it (45 daysfor a group termination program), allow a 7-day period to revoke after signing, advise the employee in writing to consult an attorney, and — for a group program — disclose the decisional unit and the job titles and ages of those selected and not selected.
A release that does not meet every OWBPA requirement is void as to age claims — the employee keeps their signing bonus and can still sue. Have counsel prepare the release.
Common questions
Is severance required in the US?
No. There is no federal statutory severance and employment is at-will (except Montana). Severance is optional unless a contract, policy or collective bargaining agreement promises it. The one exception is New Jersey, whose mini-WARN law requires one week’s pay per year of service on a covered mass layoff.
Does the WARN Act apply to me?
Only if you have 100 or more employees and hit a threshold: a plant closing (50+ at a single site) or a mass layoff (500+, or 50–499 where they are 33%+ of the site) within 30 days. Then 60 days’ written notice is required. Check your state’s mini-WARN too — several trigger at far lower head counts.
What is OWBPA?
The Older Workers Benefit Protection Act sets the rules for a valid release of age claims when you offer severance to anyone 40 or over: plain language, an ADEA reference, 21 days to consider (45 for a group program), a 7-day revocation window, advice to consult an attorney, and — for a group — disclosure of the decisional unit and the titles and ages selected and not selected.
When is final pay due?
It depends on your state — there is no federal deadline. Some states require final wages immediately on termination; most require them by the next regular payday. Whether accrued PTO must be paid out also varies by state. Confirm both with your state labor department.
These rules are current for 2026. State law does much of the work here: confirm your state’s mini-WARN, final-pay and PTO-payout rules with your state labor department, and see dol.gov and eeoc.gov for federal WARN and anti-discrimination (Title VII, ADEA for workers 40+, ADA) guidance. This is general information, not legal advice — have counsel review any release.