Guide
How to Tell Employees the Company Is Closing
Tell employees in a live meeting before any public announcement, and only after you know whether federal WARN notice is due. Plan that conversation in order: who speaks, what a WARN notice has to cover, a script outline you can adapt, and what to say about final pay and health coverage. State paycheck deadlines and the wider wind-down are separate steps.
| Fact | Detail |
|---|---|
| Federal notice floor | 60 calendar days before a covered plant closing or mass layoff. eCFR |
| Who is a covered employer | 100 or more employees, excluding part-time employees, or 100 or more who together work at least 4,000 hours a week, exclusive of overtime. eCFR |
| Final paycheck, federal | Employers are not required by federal law to give former employees their final paycheck immediately. Some states, however, may require immediate payment. U.S. Department of Labor |
| COBRA election notice | Within 14 days after the group health plan receives notice of a qualifying event. U.S. Department of Labor |
When to tell people
Employees should hear the closure from the company, live, before it is public.
Speak in a live meeting or a live call before a blog post, a customer email, or a press note. Remote teams get the same hour, not a recording sent first and a call later. A subset of the staff should not hear it from a customer, a vendor, or a group chat that started outside the company. If someone has to miss the live hour, the written note and a direct call follow the same day, from a person who was in the meeting.
The person who speaks is the one who can answer "is this real?" A founder, the CEO, or the operator who has been running the close is the usual voice. A lawyer can sit in the room. The lawyer does not open with the news unless that person is also the one the staff already know as the decision maker. Managers are not the first public voice. They are briefed earlier the same day so they are not hearing the words with everyone else and inventing answers in the hallway.
Pick the hour when the largest number of people can be present, including people in other time zones. Do not wait for a perfect slot if the news is already leaking. A short live call that tells the truth beats a polished meeting that happens after a customer has forwarded the rumor. The guides to closing, selling or licensing a company cover other single tasks. The conversation with staff is the task in front of you. Founders who are choosing among paths can read options for founders shutting down a startup before they set the meeting.
Check federal WARN notice before you announce
If federal WARN applies, the announcement is late when the written notice is late.
The WARN Act is the federal Worker Adjustment and Retraining Notification Act. The Department of Labor's compliance page points employers to the regulations in 20 CFR Part 639. 20 CFR 639.5 says notice must be given at least 60 calendar days before any planned plant closing or mass layoff, with the exceptions in 639.9. A worker's last day of employment is the date of that worker's layoff. When people do not all end on the same date, the first individual termination inside the regulation's 30-day or 90-day window is what starts the 60-day count. Each group of people who leave is entitled to a full 60 days' notice.
20 CFR 639.3(a) defines an employer as any business enterprise that employs 100 or more employees, excluding part-time employees, or 100 or more employees, including part-time employees, who in the aggregate work at least 4,000 hours per week, exclusive of hours of overtime.
20 CFR 639.3(c) defines a mass layoff as a reduction in force that is not a plant closing and that results in an employment loss at a single site of employment during any 30-day period for at least 33 percent of the active employees, excluding part-time employees, and at least 50 employees, excluding part-time employees. Where 500 or more employees, excluding part-time employees, are affected, the 33 percent requirement does not apply. A plant closing under 639.3(b) is a shutdown at a single site that results in an employment loss during any 30-day period for 50 or more employees, excluding part-time employees.
Part-time, for this count, is defined in 639.3(h): an employee who averages fewer than 20 hours a week, or who has been employed for fewer than 6 of the 12 months before the date notice is required. That definition is the one the thresholds use. It is not a payroll label your handbook happens to use.
Three situations in 20 CFR 639.9 can shorten the 60 days. Faltering company. Section 639.9(a) says this exception applies to plant closings but not to mass layoffs. Unforeseeable business circumstances. Section 639.9(b) applies to plant closings and mass layoffs caused by business circumstances that were not reasonably foreseeable when 60-day notice would have been required. Natural disaster. Section 639.9(c) applies when the plant closing or mass layoff is a direct result of a natural disaster. When an exception applies, 639.9 says the employer must give as much notice as is practicable, which may in some circumstances be notice after the fact, and must include a brief statement of the reason for reducing the notice period. The employer bears the burden of proof that an exception applies. None of the three is a reason to skip the meeting. They change when the written notice can go out. They do not change the rule that employees should hear the closure from the company.
20 CFR 639.7 says notice must be specific and lists the elements for a representative, for an employee who has no representative, and for the State dislocated worker unit and the chief elected official. Read the elements in 20 CFR 639.7 and the overview in the DOL employer guide (PDF). Do not copy paragraphs out of a blog and call them the notice.
Whether WARN applies is a decision you make before the meeting. Use does the WARN Act apply to my company for the headcount question. Build a business closing checklist by state for the tasks in order. For state notice rules, read final paycheck and WARN rules by state when closing a business.
| Recipient | What the notice covers | Primary source |
|---|---|---|
| Affected employees or their representative | Written notice to each representative of the affected employees as of the time notice is required, or, if there is no representative, to each affected employee. | 20 CFR 639.6 |
| State dislocated worker unit | Notice served on the State dislocated worker unit. Until a Governor publishes a different procedure, service on the State Governor constitutes service on that unit. | 20 CFR 639.6 |
| Chief elected official | Notice to the chief elected official of the unit of local government within which the closing or layoff is to occur. For an elected board, notice is served on the chairperson. | 20 CFR 639.6 |
The order of the conversation
The meeting is step three, not step one, because a WARN clock can already be running.
The order is the same whether the company has 12 people or 400. Federal notice rules apply only when the employer and the layoff meet the tests in 639.3. The order of the conversation still starts with that question, so a covered employer does not hold the all-hands and discover the written notice was due two weeks earlier. An employer who is clearly under the numeric tests still tells people live, before the news is public. The difference is that the written WARN notice is not the document they are waiting on.
Decide whether federal WARN notice is due before you speak
Decide whether written federal notice is due before you set the meeting. Count headcount and the layoff against 20 CFR 639.3. If you want to send notice inside 60 calendar days, read 20 CFR 639.9 first. A shorter notice still needs as much time as is practicable and a brief statement of the reason.
Tell managers the same facts the staff will hear
Managers hear the closure first, earlier the same day, and they hear the same facts the staff will hear. Give them no extra promise and no instruction to hint. A different story for managers becomes the rumor that reaches the room before you do.
Hold the meeting and say the closure in the first minutes
Say who is speaking and their role, that the company is closing, the date people stop working, and where the written detail will be. Say those facts in the first minutes, to the people in the room and on the live call. Skip metaphors, skip blame, and do not bring in a surprise guest to deliver the news.
Give each person the same written note the same day
The note matches what was said in the meeting. If federal WARN applies, the legal notice is that note, or another document that contains the elements 20 CFR 639.7 lists. Use the Department of Labor's employer guide as the overview of those elements. Do not hand out a notice you wrote to look official.
State what is known about pay, benefits, and the next date
Say what is known today about the final paycheck, health coverage, and the date someone will answer questions. If a fact is unknown, say it is unknown. Do not state a state's paycheck deadline in the meeting.
Step three is the meeting, not a slide. Open with the fact. People can absorb a date and a last day. They cannot absorb a preamble about the journey. Leave time for questions, and answer only what you decided before you walked in. If the answer is not decided, say that, and name the day you will come back with it. Step four happens the same day, including for people who joined by phone. Step five points at pay and coverage. It does not invent them.
A script outline you can adapt
The script's job is to match the written note, not to soften the fact.
This is an outline of slots, in the order a speaker can use them. It is not a letter to copy onto letterhead. A closing letter is this outline turned into prose by the company, not a template from Vetrix. Fill each slot with the fact you have. Leave a slot empty, in words, when the fact is not decided.
- Who is speaking, and their role.
- The sentence that the company is closing.
- The last day of work.
- Whether the closing is the whole company or one site.
- What is known today about pay.
- What is known today about health coverage.
- Who answers questions tomorrow, and how to reach that person.
- What the speaker does not know yet.
Write the closing sentence first, then the last day, then stop. Add the pay and coverage slots only with facts the finance lead and the group health plan administrator have already confirmed. The last slot is the one that keeps the meeting honest. "We do not know yet whether the insurer will offer continuation past the federal minimum, and Jordan will write to you on Thursday" is a complete sentence. "We will take care of everyone" is not a slot in that outline.
Read the outline aloud once before the meeting, with the written note beside it. If a sentence is in the script and not in the note, delete it from the script. If a sentence is in the note and you cannot say it out loud, fix the note before you send it. Managers who were briefed in step two should be able to point at the same note and not add a private version.
Final pay, benefits, and the next date
Tell staff the federal rule does not set their state's paycheck deadline, and show them where that deadline has to be read: in the law of the state where they work, with the lawyer who is handling the close.
Employers are not required by federal law to give former employees their final paycheck immediately. Some states, however, may require immediate payment. U.S. Department of Labor: Last Paycheck. If the regular payday for the last period someone worked has passed and they have not been paid, that same page says to contact the Wage and Hour Division or the state labor department. In the meeting, say the next payday you can actually meet, and say that a state may require a faster payment. Do not name a state's number of days unless you have that statute in front of you for that state.
For state paycheck timing and state notice statutes, read final paycheck and WARN rules by state when closing a business. The rest of the close, including taxes and the order of other work, is in how to wind down a company.
COBRA generally applies to private-sector group health plans maintained by employers with at least 20 employees on more than 50 percent of their typical business days in the previous calendar year. It also applies to plans sponsored by state and local governments. It does not apply to plans sponsored by the federal government or by churches and certain church-related organizations.
The DOL employer guide says that after the group health plan receives notice of a qualifying event, it must provide an election notice to qualified beneficiaries within 14 days. Termination of employment is a qualifying event the employer notifies the group health plan about, within 30 days. For termination other than gross misconduct, the guide lists a maximum continuation period of 18 months. The same guide says continuation coverage typically lasts 18, 29, or 36 months, depending on the qualifying event. The guide is An Employer's Guide to Group Health Continuation Coverage Under COBRA. A shorter employer FAQ is on the DOL COBRA employer FAQ. In the meeting, name the person who will send the coverage notice. Do not quote a premium, a carrier phone tree, or a month count you have not checked against that guide and the group health plan document.
The FLSA does not require vacation, holiday, severance, or sick pay. It also does not require immediate payment of final wages to terminated employees. Those matters are for agreement between the employer and the employees or their authorized representatives. Some states have laws under which wage claims may be filed. That is not a statement that this company owes no severance. A contract, a handbook the company is bound by, or a state rule can still require a payment. Say which of those you have already read, and say when the rest will be read. Do not tell the room that "federal law says we owe nothing."
What not to promise
If a fact is not decided, the sentence is that it is not decided.
Do not promise a buyer. Do not promise a date the bank will release cash. Do not say the data is anonymous. People will ask what happens to their Slack messages, their email, and their personnel file. Personal details are a different question from this meeting. For the ethics of selling records that include staff, read employee privacy when companies sell data to AI. You can say that customer and staff details are not part of a records license, if that is the decision you have made. You cannot describe a de-identification method in the all-hands and expect it to answer a privacy question.
Do not promise a reference, a severance formula, or a health-care bridge that finance has not approved. Do not ask managers to "soften it" after the meeting. The written note is the version that survives. Anything a manager adds in a side conversation will be treated as a promise.
The meeting is not the customer-data project. Read what to do with customer data when closing a business for that work. If the company is a Delaware corporation, read how to dissolve a Delaware corporation for the certificate. Canceling the tools comes after the exports. Read what to do before canceling software when closing a business.
General information only. This is not legal, tax or financial advice.
Related
- Winding down
Order of operations to wind down a company, from approval through taxes and dissolution.
- What to do with customer data when closing a business
Inventory, notice, and deletion or return of customer personal data when a business closes.
- What to do before canceling software when closing a business
Nine cross-vendor steps before you cancel: filings, admins, exports, then each vendor's own deletion page.
- Dissolve a Delaware corporation
Board and stockholder approval, franchise tax, and the Delaware certificate of dissolution.
- Who buys company data
Four kinds of AI data buyer, what each wants, and what a seller should check first.
- Closing
What to do with company data while the company is closing, before tools are canceled.
Questions about telling employees the company is closing
Does federal WARN require 60 days' notice before we tell employees the company is closing?
Covered employers give written notice at least 60 calendar days before a covered plant closing or mass layoff. That is the floor in 20 CFR 639.5. Shorter notice is allowed only in the situations 20 CFR 639.9 names: a faltering company, which applies to plant closings and not to mass layoffs; unforeseeable business circumstances; and a natural disaster. Notice is still required as much as is practicable, with a brief statement of the reason. Count your own headcount against 20 CFR 639.3 before you decide the written notice is due.
Who else has to receive a WARN notice besides the employees?
20 CFR 639.6 requires notice to each representative of the affected employees, or to each affected employee if there is no representative. It also requires notice to the State dislocated worker unit and to the chief elected official of the local government where the closing or layoff will occur. For an elected board, the notice goes to the chairperson. The written note the staff receive is not a substitute for those other notices when the statute applies.
Does federal law set a deadline for the final paycheck when a company closes?
The Department of Labor's Last Paycheck page says employers are not required by federal law to give former employees their final paycheck immediately, and that some states may require immediate payment. In the meeting, say the next payday you can meet, and say that a state may require a faster payment. Name the person who will confirm the state rule. Do not invent a number of days.
What should we tell staff about health coverage in the closure meeting?
Say only what the group health plan administrator has confirmed. The Department of Labor's COBRA employer guide says that after a plan receives notice of a qualifying event, it must give qualified beneficiaries an election notice within 14 days. Termination of employment is one of those events, and the employer notifies the group health plan within 30 days. For a termination other than gross misconduct, continuation coverage lasts 18 months. Name the person who will send that notice. Do not guess a premium in the meeting.
Should managers hear that the company is closing before everyone else?
Yes. Managers hear the same facts the staff will hear, earlier the same day, with no extra promises. They are not a second rumor channel, and they are not asked to hint before the meeting. The meeting itself still says the closure in the first minutes, to everyone who is affected, including people who work remotely. A manager who knows more than the written note will be asked about the gap. Keep the two versions the same.
Sources
- eCFR. 20 CFR 639.5, When must notice be given?. Checked 2026-11-04
- eCFR. 20 CFR 639.3, Definitions. Checked 2026-11-04
- eCFR. 20 CFR 639.9, When may notice be given less than 60 days in advance?. Checked 2026-11-04
- eCFR. 20 CFR 639.6, Who must receive notice?. Checked 2026-11-04
- eCFR. 20 CFR 639.7, What must the notice contain?. Checked 2026-11-04
- U.S. Department of Labor. Last Paycheck. Checked 2026-11-04
- U.S. Department of Labor, Wage and Hour Division. Handy Reference Guide to the Fair Labor Standards Act. Checked 2026-11-04
- U.S. Department of Labor. An Employer's Guide to Group Health Continuation Coverage Under COBRA. Checked 2026-11-04
- U.S. Department of Labor. WARN Act Compliance Assistance. Checked 2026-11-04
- U.S. Department of Labor. Employer's Guide to Advance Notice Closings and Layoffs. Checked 2026-11-04
- eCFR. 20 CFR Part 639, Worker Adjustment and Retraining Notification. Checked 2026-11-04
- U.S. Department of Labor. COBRA Continuation Coverage, employer FAQ. Checked 2026-11-04