When businesses are forced to make tough decisions about layoffs or plant closures, advance planning is not just smart—it’s required by law. In Maryland, employers must be particularly cautious. The state’s Economic Stabilization Act (ESA) imposes more stringent notice obligations than the federal WARN Act, and failure to comply can lead to significant legal exposure.
Who Is Covered?
Maryland’s ESA applies to:
Employers with 50 or more full-time employees operating in the state
Reductions in operations affecting 25 or more full-time employees over a three-month period
Relocations, shutdowns, or mass layoffs, even if temporary
This lower threshold means that many small and mid-sized businesses—those not subject to federal WARN—must still comply with Maryland’s notice requirements.
What Does the ESA Require?
Covered employers must provide written notice at least 60 days in advance to:
Affected employees
Any union representatives
The Maryland Department of Labor
Local government officials in the area of the affected facility
This requirement mirrors the federal WARN Act in terms of timing but covers more employers and situations. Read the Maryland WARN FAQ for more details.
Penalties for Noncompliance
Failing to give proper notice may result in:
Civil penalties of up to $10,000 per day
Back pay and benefits owed to affected employees
Reputational harm and increased risk of litigation
Best Practices for Employers
To ensure compliance, Maryland employers should:
Evaluate whether any workforce changes trigger the ESA notice obligations
Consult legal counsel early in the planning process
Coordinate with HR and communications teams to prepare clear and timely notifications
Maintain documentation of all notices sent and received
How Luchansky Law Can Help
Whether you’re restructuring, relocating, or downsizing, Luchansky Law can help you navigate Maryland’s WARN requirements and reduce your legal risk. Our attorneys routinely advise employers on layoff compliance and communication protocols during workforce transitions.
Have questions or concerns about a planned layoff or closure? Contact us today to discuss how we can help you stay compliant—and protect your business.
Have questions or concerns about a planned layoff or closure? Contact us today to discuss how we can help you stay compliant—and protect your business.
