Explained: Will Twitter layoffs breach American law? Here's everything you need to know

Under the ownership of Elon Musk, Twitter Inc. has started to lay off staff members. As many as 3,700 employees, or half of its workforce, were sackedby the San Francisco-based social media company on Friday.A class action lawsuit has already been filed against Twitter on the grounds that the impending layoffs will be illegal under USand California law if employees are not given early warning or severance compensation.

What does the US law say?

Warn Act violations are subject to what penalties?

If an employer is determined to have broken the WARN Act, they may be required to pay the laid-off employees 60 days' worth of back pay. Additionally, there are fines of $500 each day of infringement under the legislation. Similar punishments are imposed by comparable legislation in California and other states.

Accusations against Twitter

According to the complaint, which was submitted late on Thursday to a federal court in San Francisco, Twitter locked off its employees' accounts on that day, indicating that they would soon lose their employment. A California-based plaintiff who is one of the five listed plaintiffs claims he was fired on November 1 without warning or severance compensation.

Also WATCH |Elon Musk to introduce a new feature on Twitter, UN urges CEO to ensure respect of human rights

A lawyer for the plaintiffs named Shannon Liss-Riordan said on Friday that it appeared Twitter was making an attempt to abide with the WARN Act by providing to pay certain employees through January 4. She said that staff members were informed they will be given severance papers next week, obliging them to forego suing Twitter in return for a settlement.

Has the warn act been used to litigate other musk-run companies?

Tesla Inc. was sued in federal court in Texas in June for allegedly breaking the WARN Act when it abruptly fired 500 workers from a manufacturing in Sparks, Nevada, among other locations throughout the country. In the Tesla case, Liss-Riordan also represents the employees. Tesla has claimed that by removing underperforming employees and forgoing layoffs that required advance notice, it was just "right-sizing."

A federal judge ruled last month that Tesla employees must pursue their claims through private arbitration as opposed to going to court. As more than half of American workers in the private sector have signed agreements to arbitrate employment-related legal issues, the same problem might arise in the case against Twitter.

(With inputs from agencies)

WATCH WION LIVE HERE: