Dislocated Worker - Definition and Programs

dislocated workers standing in job line
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Dislocated workers are individuals who have lost their jobs due to a layoff. Also known as displaced workers, they’re generally perceived as experiencing job loss due to circumstances beyond their control. Workers who are terminated from employment due to unsatisfactory job performance are not considered displaced workers. Read on to learn more about dislocated workers and programs that can help.

Definition of a Dislocated Worker

According to the Department of Labor, a worker is considered dislocated if he or she meets one of the following criteria:

  • Has been laid off or received a layoff notice from a job or receives unemployment benefits as a result of being laid off and is unlikely to return to a previous occupation.
  • Was self-employed but is now without work due to economic conditions or natural disaster.
  • Is the spouse of an active duty member of the Armed Forces and lost employment as a result of relocating because of a permanent duty station change.
  • Is the spouse of an active duty member of the Armed Forces, is also unemployed or underemployed, and finding difficulty in obtaining or upgrading employment.
  • Is a displaced homemaker – someone who was taking care of a family without pay such as a stay-at-home mother or father, is no longer supported by their spouse, is unemployed or underemployed, and can't find or upgrade their employment.

Reasons for Worker Dislocation

Economic Downturn
A common reason for the dislocation of workers is a downturn in the general economy that reduces overall demand for products or services. In some cases, the impetus is a downturn in a particular industry, such as the newspaper business, which is based on economic or technological trends.  

Mergers and Acquisitions
Some employees are laid off due to the duplication of jobs when mergers or acquisitions are carried out. Other workers are dislocated due to automation or other workplace trends that reduce demand for their particular skills, so they’re let go.

Company Closings
Layoffs can occur when a company moves to a new location or closes a facility where a worker was employed. Foreign competition or outsourcing in areas like computer programming is also a factor that affects the displacement of workers.  

Unemployment Benefits
Employees who lose their jobs through no fault of their own may be eligible for unemployment benefits. Here's information on qualifying and filing for unemployment compensation.

What are Dislocated Worker Programs?

Dislocated Worker Program services are provided by State Department of Labor Offices and are designed to help workers get back to work as quickly as possible. They’re federally funded by The Workforce Investment Act (WIA). 

These programs attempt to help people to overcome obstacles such as entering a new industry, lowered demand for acquired skills, or lack of work experience or education. They’re designed to help people achieve competitive salaries to match their background.

The available programs may vary slightly based on the type of work or location of the worker. Services provided include skills assessment, career planning and counseling, job search and placement services, training, educational services, and other job seeker support services.

Examples of Dislocated Workers

  • After a plant shuts down, hundreds of displaced workers were without jobs.
  • A merger resulted in massive layoffs and generated over 500 dislocated workers.
  • An assembly line worker was displaced when his function was automated. 
  • A purchasing coordinator was laid off when the role was outsourced to a contract firm. 

Am I Eligible for a Dislocated Worker Program?

Workers who have been terminated, laid off, or received a "notice of termination or layoff" because of a permanent plant closing, a substantial layoff, foreign competition, and/or a lack of demand for their skills are eligible.

Self-employed workers who are out of work because of the economy or a natural disaster may be eligible. Manual labor including agriculture, farming, ranching, or fishing fall into this category, as do displaced homemakers. 

To determine if you may be eligible for Dislocated Worker Program services, check with your State Department of Labor.

How to Explain Your Unemployment Status

Dislocated workers should convey the circumstances underlying their unemployment in their job search communications. Make a clear statement on your resume, cover letter, applications and during your interview that indicates why you were displaced.

For example, you might say, "My position was eliminated when my department's function was outsourced. Evaluations and recommendations indicate that my performance was excellent." Provide recommendations or letters of introduction to employers to counteract any assumptions that you were terminated for cause.