Maryland WARN Act: Coverage, Notice Rules, and Penalties

The Maryland WARN Act, formally the Economic Stabilization Act, requires employers with 50 or more qualifying employees to give 60 days’ written notice before a major layoff, relocation, or shutdown.¹ Notice goes to the affected workers, the Maryland Department of Labor, and the top elected official in the area where the jobs will be lost.² An employer that ignores the requirement can be ordered to comply and fined up to $10,000 for each day of violation.³

Which Employers Are Covered

The law reaches any person, corporation, or other entity running an industrial, commercial, or business operation in Maryland with at least 50 qualifying employees on the payroll. State and local government operations are excluded, and so is any employer that has been doing business in Maryland for less than a year.¹

Not every name on the payroll counts toward the 50-employee threshold. The statute defines an employee as someone paid an hourly or salaried wage, or working in a managerial or supervisory role, but it leaves out anyone who averages fewer than 20 hours per week or has worked for the employer for fewer than six of the past 12 months.¹ A company with 60 people on paper can still fall under the threshold if enough of them are very part-time or recently hired. Workers who accept a transfer to another company worksite within 30 days of being offered it also drop out of the count.⁴

What Triggers the 60-Day Notice

The statute uses the phrase “reduction in operations” for the events that start the notice clock. Two scenarios qualify:

Relocating part of an operation to another site in a way that reduces the employee count at the original workplace by at least 25% or 15 employees, whichever is greater.
Shutting down all or part of a workplace in a way that reduces the employee count by at least 25% or 15 employees, whichever is greater, over any three-month period.

Both thresholds come from §11-301 of the Labor and Employment Code.¹ The three-month window is important. It stops an employer from stringing out small rounds of layoffs to stay below the trigger; cumulative cuts over any rolling 90 days are what matter.

A reduction is treated as permanent unless the employer has committed in a written contract to restore the operation within three months.¹

Layoffs the Law Doesn’t Cover

Several situations fall outside the statute entirely under §11-302, no matter how many jobs are affected:

Reductions caused solely by a strike or lockout.
Commercial, industrial, or agricultural operations run by the state or its political subdivisions.
Job losses at construction projects or other temporary worksites.
Seasonal reductions that the Maryland Department of Labor determines are customary in the industry.
Reductions caused by the employer filing for federal bankruptcy.

⁴

The bankruptcy carve-out catches many workers off guard. When a company files for federal bankruptcy protection, Maryland’s notice requirements drop away, even when hundreds of people lose their jobs. In that situation, workers look to the bankruptcy proceedings themselves and to the federal WARN Act for any protection.

Who Gets the Notice

Written notice must go out at least 60 days before the reduction begins, and three parties must receive it:²

The affected employees, or the union representing them if there is one.
The Maryland Department of Labor’s Dislocation Services Unit, which coordinates rapid-response services for displaced workers. Submissions go to dlwdalwarn-labor@maryland.gov or by mail to 100 S. Charles Street, Tower 1, Suite 2000, Baltimore, MD 21201.
The highest elected official in the local jurisdiction where the layoffs will happen.

Notices generally identify the worksite, give a company contact who can answer questions, state the expected date of the layoffs, and say whether the reduction is permanent or temporary.⁵ The Department of Labor publishes a sample notification letter employers can adapt.

When Less Than 60 Days Is Allowed

The statute carves out two narrow situations where shorter notice can be lawful:

The employer was actively seeking capital or new business that would have prevented or postponed the reduction, and reasonably believed that giving 60-day notice would have driven the financing or deal away.
The reduction was caused by a flood, earthquake, drought, or similar disaster beyond the employer’s control.

⁶

Neither exception excuses an employer from giving notice. The employer still has to notify as soon as practicable and include a brief written explanation of why the full 60 days wasn’t possible.⁶ Both exceptions are read narrowly.

Penalties for Skipping Notice

An employer that violates the notice requirement faces two consequences under §11-306. The Secretary of Labor, or a designee, must issue an order directing the employer to comply. The Secretary may also impose a civil penalty of up to $10,000 per day for each day of violation.³ On a full 60-day obligation ignored outright, that puts the theoretical ceiling at $600,000 in civil penalties.

Four factors shape the size of any penalty: the gravity of the violation, the size of the business, whether the employer acted in good faith, and the employer’s history of prior violations.³ A complete failure to notify draws a sharper response than a notice that was a few days late, and a repeat offender fares worse than a first-time violator who tried to comply. Before any penalty takes effect, the employer is entitled to formal notice and a hearing.

How Maryland’s Law Differs From Federal WARN

A Maryland employer may be covered by both the state Economic Stabilization Act and the federal Worker Adjustment and Retraining Notification Act. The two laws run alongside each other, and complying with one does not automatically satisfy the other. The main differences are about scale:

Maryland’s law reaches employers with 50 or more qualifying employees. The federal WARN Act applies only to employers with 100 or more employees, excluding part-time workers from that count.¹⁷
Maryland’s layoff trigger is 25% of the workforce or 15 employees, whichever is greater, measured over three months. Federal WARN requires at least 50 affected employees and at least 33% of the active workforce during a 30-day period, though the 33% requirement falls away when 500 or more are affected.⁷
Maryland excludes employees averaging under 20 hours per week when counting toward its threshold. Federal law excludes part-time employees entirely from the 100-employee count.

The practical consequence is that Maryland’s law captures smaller employers and smaller layoff events than federal law. A company with 55 employees planning to cut 15 jobs owes notice in Maryland but sits well below the federal threshold. Both statutes require 60 days of advance notice to broadly the same group of recipients.²

What Happens When a Business Is Sold

In a sale, the notice obligation splits by timing. The seller handles any required notice for layoffs occurring up to and including the sale date. Once the sale closes, the buyer takes on the obligation for layoffs after that. Employees of the seller become employees of the buyer at closing, so the change in ownership on its own is not an employment loss that triggers notice.² The risk for workers shows up when a buyer closes a deal and then restructures soon after. If the buyer’s post-sale cuts hit the thresholds, the 60-day clock runs from the buyer’s decision, and the buyer owes the notice.

1
Maryland General Assembly. Maryland Code Labor and Employment 11-301 – Definitions
2
Maryland Department of Labor. Work Adjustment and Retraining Notification (WARN) and Other Dislocation Notices
3
Maryland General Assembly. Maryland Code Labor and Employment 11-306 – Violations and Penalties
4
Maryland General Assembly. Maryland Code Labor and Employment 11-302 – Applicability of Subtitle
5
Maryland Department of Labor. Work Adjustment and Retraining Notification (WARN) Log Year 2024
6
Maryland General Assembly. Maryland Code Labor and Employment 11-305 – Written Notice Required
7
eCFR. 20 CFR 639.3 – Definitions