A manager with her back to the screen prepares to tell a roomful of her employees her business is closing

How to Tell Your Employees Your Business Is Closing

Early in the closing process, you should tell your employees your plans to close and dissolve your business. Federal and state laws specify when and how you should navigate this process. Here are some of the key guidelines:

  • Owners with 100 or more employees are required by federal law to provide up to 60 days of written notice of an impending closure.
  • Owners with fewer employees that conduct business in certain jurisdictions may also be required to provide up to 60 days of written notice of an impending closure.

 

Certain states and territories have additional laws you'll need to follow when closing a business that has employees on staff. Here is a short sample of those laws:

  • Owners must be prepared to pay their employees the full amount of wages they've earned up to the close of the business.
  • Owners must pay their employees for the full allotment of vacation days they've accrued at the time of the business's closure.
  • Companies must provide final paychecks within the precise amount of time that's specified by their state, which may be immediately after providing the news or within a specific number of days after announcing a closure (generally by the date of the next occurring paycheck).
  • Owners must continue paying payroll taxes through the final day their employees report to work.

 

What are the laws in my state?

Every state has a government labor office that can explain your legal obligations. Call the office in every state in which you have employees to learn how to proceed:

Alabama

(334) 242-3960

Hawaii

(808) 586-8844

Michigan

(517) 241-6712

North Carolina

(800) 625-2267

Utah

(801) 530-6800

Alaska

(907) 465-2700

Idaho

(208) 332-3579

Minnesota

(651) 254-5010

North Dakota

(701) 328-2660

Utah

(801) 530-6800

Arizona

(602) 542-4515

Illinois

(312) 793-2800

Mississippi

(601) 321-6000

Ohio

(614) 644-2239

Virginia

(804) 371-2327

Arkansas

(501) 682-4500

Indiana

(317) 232-3655

Missouri

(573) 751-4091

Oklahoma

(405) 521-6100

Washington

(360) 902-5800

California

(844) 522-6734

Iowa

(515) 281-5915

Montana

(406) 444-2840

Oregon

(971) 673-0761

West Virginia

(304) 558-7890

Colorado

(303) 318-8441

Kansas

(785) 296-5000

Nebraska

(402) 471-9000

Pennsylvania

(717) 787-5279

Wisconsin

(608) 266-3131

Connecticut

(860) 509-6200

Kentucky

(502) 564-3070

Nevada

(775) 486-2650

Rhode Island

(401) 462-8550

Wyoming

(307) 777-8728

Delaware

(302) 761-8176

Louisiana

(225) 342-3111

New Hampshire

(603) 271-3176

South Carolina

(803) 896-4300

District of Columbia

(202) 671-1900

Maine

(207) 621-5095

New Jersey

(609) 659-9045

South Dakota

(605) 773-3101

Florida

(850) 245-7105

Maryland

(410) 230-6020

New Mexico

(505) 841-8491

Tennessee

(844) 224-5818

Georgia

(404) 232-7300

Massachusetts

(617) 626-7122

New York

(518) 457-9000

Texas

(512) 475-2670

 

What else should I do to support my employees?

After meeting the legal requirements, shift your focus to supporting your team through their exit. Here's what you could do:

 

There are other steps you should take, too. These include:

 

State labor offices should be able to walk you through all the steps you need to take to navigate employee-related closure issues. Still, you may want to speak with a labor and employment attorney to discuss issues that are specific to your business.

We can help you connect with an attorney. Click the Connect button below to get started.

 

What's next?

It's important to tell your employees that your business is closing, but others will need to hear your news, too. Shift your focus to informing your vendors, contractors, freelancers, suppliers, and, importantly, your business's creditors. Here are some resources that can help with these steps:

We can help you with every part of this process. Log into your owner's portal for the steps you need to take to close your business.

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