Economic News Release

Mass Layoffs Technical Note

Technical Note

   The Mass Layoff Statistics (MLS) program is a federal-state program which identifies,
describes, and tracks the effects of major job cutbacks, using data from each state's
unemployment insurance database. Employers which have at least 50 initial claims filed
against them during a consecutive 5-week period are contacted by the state agency to
determine whether these separations are of at least 31 days duration, and, if so,
information is obtained on the total number of persons separated and the reasons for
these separations. Employers are identified according to industry classification and
location, and unemployment insurance claimants are identified by such demographic
factors as age, race, gender, ethnic group, and place of residence. The program yields
information on an individual's entire spell of unemployment, to the point when regular
unemployment insurance benefits are exhausted.

Definitions

   Domestic relocation. A movement of work from an establishment within the U.S. to a
location also inside the U.S., either within the same company or to a different company
altogether (domestic outsourcing).

   Employer. A firm covered by state unemployment insurance laws. Information on employers
is obtained from the Quarterly Census of Employment and Wages (QCEW) program, which is
administered by the Bureau of Labor Statistics (BLS).

   Extended mass layoff event. A layoff defined by the filing of 50 or more initial claims
for unemployment insurance benefits from an employer during a 5-week period, with at least
50 workers separated for more than 30 days. Such layoffs involve both persons subject to
recall and those who are terminated.

   Initial claimant. A person who files any notice of unemployment to initiate a request
either for a determination of entitlement to and eligibility for compensation, or for a
subsequent period of unemployment within a benefit year or period of eligibility.

   Movement of work. The reassignment of work activities previously performed at the
worksite by the company experiencing the layoff (1) to another worksite within the
company; (2) to another company under formal contractual arrangements at the same
worksite; or (3) to another company under formal contractual arrangements at another
worksite either within or outside of the U.S.

   Outsourcing. A movement of work that was formerly conducted in-house by employees paid
directly by a company to a different company under a contractual arrangement.

   Overseas relocation. A movement of work from an establishment within the U.S. to a
location outside of the U.S. (offshoring), either within the same company or to a
different company altogether (offshore outsourcing).

   Relocation of work action. A movement-of-work action where the employer provides
information on the new location of work and/or the number of workers affected by the
movement. Events may involve more than one action per employer if work is moved to more
than one location.

   Separations. The number of individuals who have become displaced during an extended
mass layoff event as provided by the employer, regardless of whether they file for
unemployment insurance or not.

   Worksite closure. The complete closure of an employer or the partial closure of an
employer with multiple locations where entire worksites affected by layoffs are closed.

Revisions to preliminary data

   The latest quarterly data in this news release are considered preliminary. After
the initial publication of quarterly information, more data are collected as remaining
employer interviews for the quarter are completed and additional initial claimant
information associated with extended layoff events is received.

Movement of work concepts and questions

   Beginning in 2004, the economic reasons "domestic relocation" and "overseas relocation"
were replaced by the movement of work concept. The movement of work data are not collected
in the same way as the relocation reasons in releases prior to 2004; therefore, the movement
of work data are not comparable to the data for those discontinued reasons.

   Questions on movement of work and location are asked for all layoff events when the
reason for separation is other than "seasonal work" or "vacation period," as these are
unlikely. Movement of work questions  are asked after the analyst verifies that a layoff
in fact occurred  and lasted more than 30 days. If the reason for layoff is other than
seasonal or vacation, the employer was asked the following:

   (1) "Did this layoff include your company moving work from this location(s) to a
       different geographic location(s) within your company?"

   (2) "Did this layoff  include your company moving work that was performed in-house by
       your employees to a different company, through contractual arrangements?"

   A "yes" response to either question is followed by: "Is the location inside or outside
of the U.S.?" and "How many of the layoffs were a result of this relocation?"

   Layoff actions are classified as "domestic relocation" if the employer responds "yes"
to questions 1 and/or 2 and indicates the location(s) was inside the U.S.; "overseas
relocation" indicates that the location(s) was outside the U.S.

Reliability of the data

   The identification of employers and layoff events in the MLS program and associated
characteristics of claimants is based on administrative data on covered employers and
unemployment insurance claims, and, therefore, is not subject to issues associated
with sampling error. Nonsampling errors such as typographical errors may affect the
identification of layoff events and associated claimants, but are not likely to be
significant.

   With one exception, all employers in the private nonfarm sector identified as having
a mass layoff based on administrative data are asked the interview questions. These
employer responses are also subject to nonsampling error. Nonsampling errors can occur
for many reasons, including the inability to obtain information for all respondents,
inability or unwillingness of respondents to provide correct information, and errors
made in the collection or processing of the data.

   Beginning with first quarter 2013 data, employers in California identified as having
mass layoff events from the administrative and support services (NAICS 561) industry
subsector are randomly selected to participate in the employer interview. Sampling
weights are applied to data collected from these employer interviews, which represent
responses for those employers not selected for employer contact. These data are subject
to sampling errors which can result from the variation that occurs by chance because a
sample is surveyed rather than the entire universe of NAICS 561 employers in California
identified as having layoff events.

   For the first quarter of 2013, outright refusal to participate in the employer
interview accounted for 5.4 percent of all private nonfarm events. Although included
in the total number of instances involving the movement of work, employers in 11
relocations were unable to provide the number of separations specifically associated
with the movement of work, 2 of which involved out-of-country moves.

Additional information

   Information in this release will be made available to sensory impaired individuals
upon request. Voice phone: (202) 691-5200; Federal Relay Service: (800) 877-8339.



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Last Modified Date: May 13, 2013
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