When a company the size of Groupon announces a workforce reduction, the first question most affected workers ask is simple: what am I owed? The answer depends on a web of federal statutes, state laws, and whatever terms the company puts in front of you. No federal law requires private employers to offer severance at all. But two federal statutes, the WARN Act and the Older Workers Benefit Protection Act (OWBPA), create hard timing and notice obligations that directly shape your package. Understanding those obligations gives you the clearest picture of what is negotiable and what is already locked in by law.

To see what this looks like in practice, take Priya, a 44-year-old senior product manager at Groupon's Chicago office with eight years of tenure and a base salary of $165,000. Priya received a separation agreement the same week the reduction was announced. The rest of this guide walks through every line of that agreement using the same statutes that govern yours.

What did Groupon disclose about the 2026 reduction?

Publicly traded companies that conduct significant layoffs typically file an SEC Form 8-K under Item 2.05, which covers costs associated with exit or disposal activities. Groupon disclosed its restructuring in a Form 8-K filed with the SEC on May 21, 2026, reporting an overall reduction of up to 400 positions globally (employees and contractors), with the majority expected by the end of the third quarter. (SEC Form 8-K) The filing does not set individualized separation terms or how the reduction is distributed across specific locations or roles; those are governed by the agreement each employee receives.

What matters for your situation is not the press release. It is the separation agreement sitting in your inbox and the federal and state laws that constrain it.

Does the WARN Act apply to Groupon's layoff?

The federal Worker Adjustment and Retraining Notification (WARN) Act applies to employers with 100 or more full-time employees. [1] A "plant closing" or "mass layoff" triggers a 60-calendar-day advance written notice requirement to affected workers, the state dislocated-worker unit, and the chief elected official of the local government. [1]

A mass layoff under the statute means a reduction of at least 50 employees at a single site of employment during any 30-day period, provided those 50 workers constitute at least one-third of the site's workforce. If 500 or more employees are laid off at a single site, the one-third threshold does not apply. [1]

When an employer fails to provide the full 60 days of notice, the penalty is up to 60 days of back pay and benefits for each affected employee. [2] Back pay is calculated at the higher of the employee's average regular rate over the last three years or the employee's final regular rate. [2]

The DOL's guide for workers explains the practical steps for filing a WARN complaint in federal district court. [3] There is no administrative agency that enforces WARN; affected employees must bring the claim themselves or as a class.

Do state mini-WARN laws add anything beyond the federal rule?

Several states impose their own plant-closing or mass-layoff notice requirements that are stricter than the federal WARN Act. If Groupon has employees at sites in any of these states, the longer notice period or lower headcount threshold applies.

See the cited state-by-state breakdown in our mini-WARN guide (it separates employer-size thresholds from affected-employee triggers and includes verified sources for each state).

Low confidence

Because no verified citation bundle source confirms which specific state sites Groupon's 2026 reduction covers, check your own state's department of labor website to see whether a mini-WARN statute applies. Illinois (where Groupon is headquartered) generally requires 60 days' notice like the federal WARN Act, but its state mini-WARN law applies to employers with 75 or more full-time employees rather than the federal 100-employee threshold. New York's law adds 30 extra days of notice and cuts the threshold to 25 full-time employees.

How does the OWBPA waiver clock work for employees 40 and older?

The Older Workers Benefit Protection Act, codified at 29 U.S.C. § 626(f), sets mandatory conditions for a valid waiver of age-discrimination claims in a severance agreement. [4] If the waiver does not meet every requirement, it is not "knowing and voluntary," and a court can void it.

For an individual termination (not part of a group program), the employee must receive at least 21 days to consider the agreement. [4] For a group layoff or exit-incentive program, the consideration period extends to 45 days. [4] After signing, the employee has 7 days to revoke the agreement. [4] No severance payment can be made until that 7-day revocation window closes.

The statute also requires the employer to advise the employee in writing to consult an attorney, to use language the employee can understand, and (in a group layoff) to disclose the job titles and ages of all individuals eligible and ineligible for the program. [4]

Worked example

Priya's OWBPA timeline, group layoff scenario

Priya is over 40, so OWBPA's waiver protections apply to her. (29 U.S.C. § 631) Her layoff is part of a group program affecting more than one employee.

Day 0: Priya receives the separation agreement and OWBPA disclosure (list of job titles and ages of affected and unaffected employees)
Day 1 through Day 45: Priya's consideration period. She can consult an attorney, ask questions, and request changes.
Day 45: Deadline to sign
Day 46 through Day 52: 7-day revocation period. Priya can revoke her signature for any reason.
Day 53: Revocation window closes. Severance payment may now be processed.

If Priya's agreement states a 21-day window instead of 45, that is a red flag. Group layoffs require the longer window under 29 U.S.C. § 626(f)(1)(F). [4]

The EEOC's final regulation on OWBPA provides additional detail on what the written disclosure must contain, including decisional-unit definitions and eligibility factors. [5]

How does severance pay interact with unemployment insurance?

The answer depends on which state you file in and how your severance is structured (lump sum versus periodic payments).

Illinois: Illinois does not offset unemployment benefits for severance pay. Workers can file for unemployment immediately after their last day of work, regardless of a lump-sum severance payment.

California: The California Employment Development Department treats severance as a payment "in lieu of notice" only if it is allocated to a specific period. A lump-sum severance that is not tied to a particular week-by-week period generally does not reduce unemployment benefits. [6]

Pennsylvania: Pennsylvania deducts severance from unemployment compensation on a week-by-week basis if the severance is paid periodically. A lump sum allocated across weeks will also reduce benefits for those weeks. [7]

The structure of the payout matters. If you have any flexibility to choose lump-sum versus periodic payments, check your state's treatment before signing. Use the severance calculator to model the tax effect of each option.

What terms in the agreement are negotiable?

No federal statute forces a private employer to offer severance at all, which means almost every term is a product of negotiation, not law. The most commonly negotiated elements include:

Cash multiple. A starting offer of one or two weeks per year of service is common in tech, but the number is not fixed by statute. Priya, with eight years, could receive anywhere from 8 to 16 weeks as a baseline.
COBRA subsidy or healthcare continuation. Employers sometimes pay the COBRA premium for a set number of months. Federal COBRA requires only that the employee be offered continuation coverage at full cost plus a 2% administrative fee. Any employer subsidy above that is negotiable.
Equity treatment. Unvested RSUs or stock options often accelerate partially upon an involuntary termination. The terms are in the original equity grant agreement, but companies sometimes extend acceleration as part of severance negotiations.
Reference language. A written commitment to a neutral or positive reference, with a named contact, can be more valuable than an extra week of pay.
Outplacement services. Some companies offer career coaching or job-placement assistance. The value varies.

Low confidence

Because no verified public-record source confirms Groupon's specific offer terms, treat the items above as a checklist rather than a benchmark. Compare your offer against industry peers by running your details through the severance calculator.

For a deeper look at negotiation tactics, see our guide on how to negotiate severance.

What should you do during the consideration window?

The consideration window (21 or 45 days, depending on whether OWBPA applies and whether the layoff is individual or group) is your single best window for action. Here is a concrete checklist:

Count calendar days from your WARN notice date. If fewer than 60 days elapsed between written notice and your last day, document that gap. The DOL's employer guide explains the notice requirements in detail. [8]
Read the waiver language. If you are 40 or older, confirm the agreement meets every OWBPA requirement: written advice to consult an attorney, the correct consideration period, the 7-day revocation clause, and (for group layoffs) the disclosure of job titles and ages. [4]
File for unemployment immediately. Do not wait for severance to arrive. In most states, including Illinois, severance does not delay eligibility.
Consult an employment attorney. Many offer free initial consultations. The statute itself tells your employer to advise you to do this. [4]
Model the tax impact. Severance is taxed as supplemental wages. Under current IRS rules, severance paid as supplemental wages is generally subject to a flat 22% federal withholding rate on supplemental wages up to $1 million, with a higher flat rate applying above that threshold; these rates can change, so always confirm against current IRS guidance. Use the severance tax calculator to estimate your net payout.
Negotiate before you sign. Once you sign (and the revocation window closes), the terms are final.

For more context on WARN Act obligations, see our WARN Act calculator and explainer. And for a broader perspective on separation packages across the tech sector, read our guide to severance pay in 2026.

Frequently asked questions

How many days of notice does the WARN Act require?

The federal WARN Act requires 60 calendar days of advance written notice before a plant closing or mass layoff takes effect. [1] The notice must go to each affected employee individually, to the state dislocated-worker unit, and to the chief elected official of the relevant local government. If the employer provides fewer than 60 days, affected employees are entitled to back pay and benefits for each day of the shortfall, up to 60 days total. [2] The penalty is enforced through federal district court, not an administrative agency.

What is the OWBPA consideration period for a group layoff?

Workers aged 40 and older who are part of a group layoff or exit-incentive program must receive at least 45 days to consider a severance agreement that includes a waiver of age-discrimination claims. [4] For an individual (non-group) termination, the minimum is 21 days. After signing, every worker 40 and older gets 7 additional days to revoke. The employer must also provide a written list of job titles and ages of all employees who are eligible and ineligible for the program. [4]

Does severance pay reduce unemployment benefits in Illinois?

Illinois does not offset unemployment insurance benefits for severance payments. Workers can file for unemployment as soon as their employment ends, even if they receive a lump-sum severance check. Rules differ by state. In Pennsylvania, severance allocated on a week-by-week basis does reduce benefits for those weeks. [7] California generally does not reduce benefits for lump-sum severance that is not tied to a specific period. [6] Always verify with your state's unemployment agency before signing.

Can I negotiate the terms of my Groupon severance package?

Yes. No federal statute mandates a specific severance amount for private-sector layoffs. The cash multiple, COBRA subsidy duration, equity acceleration, outplacement services, and reference language are all products of negotiation between the employer and the departing employee. The consideration window (21 or 45 days under OWBPA for workers 40 and older) is your built-in negotiation runway. [4] Use the severance calculator to benchmark your offer, and consult an employment attorney before the window closes.

Who enforces the WARN Act if my employer violated it?

The WARN Act is enforced through private lawsuits in federal district court, not by an administrative agency like the DOL or NLRB. [2] Affected employees can bring claims individually or as a class. The DOL publishes guidance for both workers and employers, but does not adjudicate WARN complaints. [3] Remedies include up to 60 days of back pay and benefits, calculated at the employee's final regular rate or three-year average rate, whichever is higher. Civil penalties of up to $500 per day may also apply to employers who fail to notify local government. [2]

Should I sign the severance agreement before consulting a lawyer?

No. The OWBPA itself requires your employer to advise you in writing to consult an attorney before signing. [4] You have a minimum of 21 days (or 45 days in a group layoff) to review the agreement, and 7 days after signing to revoke it. Many employment attorneys offer free initial consultations, and the cost of a one-hour review is small relative to the value of the package. If any OWBPA requirement is missing from the agreement, the waiver of age-discrimination claims is voidable, which changes your bargaining position significantly.

Sources & verification

98 / 100 verifiedReviewed June 12, 2026

Every numeric claim, statute citation, and factual assertion in this post was verified against primary sources. Indexed dollar figures (wage bases, contribution limits, supplemental rates) were checked against our internal registry of agency-published values; all other claims were checked by an automated AI fact-checker. The 2-point gap reflects 1 passagewhere the fact-checker’s reading of the primary source differed from ours; the disputed reading is attached to the source it concerns below.

The score reflects the state of verification on the review date, not a permanent guarantee, since statutes get amended and agency guidance changes. See how we score accuracy for the full process.