Economic News Release

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 per-
iod 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. Em-
ployers 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 ofEmployment 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 com-
pensation, 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 arrange-
ments 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 em-
ployees 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 veri-
fies 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 2012 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 2012, outright refusal to participate in the employer 
interview accounted for 5.4 percent of all private nonfarm extended mass layoff events. 
Although included in the total number of instances involving the movement of work, 
employers in eight relocations were unable to provide the number of separations 
specifically associated with the movement of work.

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.