What Is a Dislocated Worker?

Definition & Examples of a Dislocated Worker

Fired employee with a box of his personal items
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Dislocated workers are individuals who have lost their jobs due to a layoff. Also known as displaced workers, they've experienced job loss due to circumstances beyond their control. Workers who are terminated due to unsatisfactory job performance are not considered displaced workers.

Learn more about dislocated workers and programs that can help them get back to work.

What Is a Dislocated Worker?

According to the Department of Labor, workers are considered dislocated if they meet one of the following criteria:

  • They have been laid off or received a layoff notice from a job.
  • They were self-employed but are now without work due to economic conditions or a natural disaster.
  • They are the spouse of an active duty member of the Armed Forces and have lost employment or are underemployed as a result of relocating due to a permanent duty station change.
  • They are a displaced homemaker, which is someone who was taking care of a family without pay, and they are no longer supported by their spouse and are unemployed or underemployed.

Alternate name: Displaced worker

How Does Being a Dislocated Worker Work?

Individuals become dislocated workers for several reasons, including the following:

Economic Downturn

A common reason for the dislocation of workers is a downturn in the general economy. This lowers the demand for products or services and reduces the need for workers. Many individuals have become dislocated workers in the wake of COVID-19, for example. In some cases, layoffs are due to a downturn in a particular industry, such as the newspaper business. Industry-wide layoffs may be due to 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. Mergers happen when two companies are being combined into one organization. Acquisitions occur when one company buys out another.

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 is also a factor that affects the displacement of workers. 

Assistance for Dislocated Workers

Dislocated Worker Program services are provided through state 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 help people overcome obstacles to finding new employment, including lacking the skills to enter a new industry or a need for further education or training.

The available programs vary slightly based on the state, the type of work, and the worker's location. Services provided include skill assessments, career planning and counseling, job search and placement services, training, educational services, and other job seeker support services.

Dislocated Worker Program Eligibility

Workers who have been laid off, or received notice that they will be laid off because of a permanent plant closing, a substantial layoff, foreign competition, and/or a lack of demand for their skills are typically eligible for assistance.

Self-employed workers who are out of work because of the economy or a natural disaster may also be eligible. Manual laborers, including those working in 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's labor office. You can connect with these services and learn if you're eligible at your local American Job Center.

Unemployment Benefits

Employees who lose their jobs through no fault of their own may be eligible for unemployment benefits. Unemployment benefits are based on a percentage of your income while working and distributed through the state where you worked. These benefits are temporary, and you must be looking for work and available for work to qualify.

Due to COVID-19, the federal government temporarily expanded unemployment benefits, increasing the weekly benefit and allowing more workers to qualify, including the self-employed.

Key Takeaways

  • Dislocated workers are individuals who have lost their jobs due to a layoff.
  • The Department of Labor also categorizes self-employed individuals who aren't working due to economic conditions or a natural disaster, spouses of active-duty members of the Armed Forces who are unemployed, and displaced homemakers as dislocated workers.
  • Individuals may become dislocated workers due to an economic downturn, mergers and acquisitions, or company closings. 
  • Dislocated workers may be eligible for job search assistance and unemployment benefits. 

Article Sources

  1. GPO. "Public Law 113-128—July 22, 2014," Pages 7-9. Accessed July 27, 2020.

  2. Department of Labor. "Rapid Response Services for Workers." Accessed July 27, 2020.