Legal Protections for Employees in Bankruptcy
If a Company Goes Bankrupt, Do Employees Have Any Legal Recourse? When a company goes bankrupt, it can be a complex and uncertain time for its employees. Many workers may worry about their job security, future employment prospects, and the potential loss of wages and benefits. In this situation, employees need to understand their rights and any legal recourse that may be available to them. Legal Protections for Employees in Bankruptcy Fortunately, federal law provides certain protections for employees in the event of company bankruptcy. The most important of these is the Worker Adjustment and Retraining Notification (WARN) Act, which requires companies with 100 or more employees to give at least 60 days' notice before a mass layoff or plant closing. This gives workers time to find new jobs and make other necessary arrangements. Additionally, the Employee Retirement Income Security Act (ERISA) protects employees' pensions and other retirement benefits in the event of bankruptcy....