Dislocated Worker

What Is a Dislocated Worker?

A dislocated worker – sometimes called a displaced worker – is an employee that becomes unemployed due to reasons that are out of their control. While the term sounds like it’s based around geography, it’s more about why someone lost their job.

There are several reasons why an employee may become a dislocated worker, but commonly it’s due to being laid off by the employer – often due to a declining economy.

It’s worth noting that self-employed people can also become dislocated workers, also often due to not being able to sustain their employment due to a declining economy.

Other causes of dislocated workers are mergers, acquisitions, and company closings.

What Are the Definitions of Dislocated Workers?

Dislocated worker – this is simply when an employee has been terminated or laid off by their employer

Mass lay off or closure – when a company closes or reduces its workforce, you can become a dislocated worker

Self-employed – people who are self-employed can become dislocated when there is an economic turndown or no longer enough work because of a natural disaster

Displaced homemaker – if somebody has been providing unpaid services to family members and their income can no longer be sustained, that can be classed as a dislocated worker

Foreign trade – an employee can be classed as dislocated if they lose their job due to offshoring

Spouse of a member of the Armed Forces – someone may become a dislocated worker if the unemployment arises because of a relocation of their spouse in the Armed Forces.

Who Doesn’t Qualify as a Dislocated Worker?

While there are many ways that you can qualify as a dislocated worker, there are a couple of instances when you don’t qualify:

• When an employee quits or resigns from their job
• When an employee has the job terminated due to poor performance

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See our full list of over 50 Small Business Terms here. 

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