The WARN Act
(Worker Adjustment and Retraining Notification Act)
Your Right to Notice Before a Plant Closing or Mass Layoff Under the Worker Adjustment and Retraining Notification (WARN) Act
The WARN Act is a federal law that protects workers as well as their families and communities by requiring employers to provide notification 60 calendar days in advance of plant closings and mass layoffs. The purpose of the advance notice is to provide workers and their families some transition time to adjust to and prepare for the loss of employment. Advance notice gives workers an opportunity to seek and obtain alternative jobs or enter skill training or retraining programs that will allow them the chance to compete in the job market. Depending on where you live, some states also have a separate, state laws (mini-WARN Acts) requiring notice prior to a plant closing or layoff.
What is the penalty if an employer violates the WARN Act?
If an employer violates the WARN Act, it can be liable for back pay for each day of violation and benefits up to a maximum of 60 days for each employee who did not receive the required notice. An employer can reduce the amount it is liable for by paying wages for the period of the violation or making payments for the employee’s benefits during the period of the violation (for example, by paying health benefit premiums or making payments to a retirement plan attributable to the employee). Employers can also be subject to $500 in civil penalties for each day an employer fails to provide notice to a unit of local government.
Employees who are asked to sign a release or waiver when they are laid off may want to read the papers they are being asked to sign to check what potential claims, if any, their employer is asking them to give up since it may include a release of WARN Act claims.
Which employers must give advance notice under the WARN Act?
As a general matter, employers that have 100 or more employees, excluding part-time employees must provide advance notice under the WARN Act. A part-time employee under the WARN Act is an employee who averages less than 20 hours per week or who has been employed for fewer than 6 of the 12 months before the date on which notice is required. However, regular federal, state, and local government entities that provide public services are not covered by the WARN Act.
When must an employer give 60 calendar days advance notice of a plant closing or mass layoff?
As a general matter, an employer cannot order a plant closing or mass layoff until the end of a 60-day period after the employer serves written notice of the closing.
A WARN Act notice will be required for a plant closing or mass layoff where employees will be laid off for more than 6 months or will have their regular hours of work reduced by more than half during each month of a 6 month period.
What is considered a plant closing or mass layoff?
A plant closing is the permanent or temporary shutdown of a single site of employment, or one or more facilities or operating units within a single site of employment, if the shutdown will result in an employment loss at the single site of employment during any 30-day period for 50 or more full-time employees.
A mass layoff is a reduction in force that will result in an employment loss at the single site of employment during any 30 day period for (1) at least 50-499 full-time employees if they represent at least 33% of the total active workforce at a single site of employment or (2) 500 or more full-time employees at a single employment site.
Are there times when an employer can give less than the 60 days notice required by the WARN Act?
There are three, limited circumstances under which an employer may not need to give the full 60 days advance notice of a plant closing or mass layoff.
- First, if an employer was actively seeking capital or business which would enable the employer to avoid or postpone the shutdown and the employer reasonably and in good faith believed that giving the notice required would have precluded the employer from obtaining the needed capital or business, then the notice period may be reduced.
- Second, if the closing or layoff is caused by business circumstances that were not reasonably foreseeable as of the time that notice would have been required, the notice period may be reduced. For COVID-19 related closings or layoffs, the facts and circumstances of the particular situation will dictate whether employers may be permitted to provide employees with less than 60 days of notice. The test for determining whether a business circumstance is reasonably foreseeable is based on an employer’s “business judgment.” An employer must exercise “commercially reasonable business judgment as would a similarly situated employer in predicting the demands of a particular market.” 20 C.F.R. § 639.9(b)(2).
- Third, if the plant closing or mass layoff is due to any form of natural disaster, such as a flood, earthquake, no advance notice is required.
Even if a WARN exception applies, any event that triggers WARN still requires notices to affected employees.
In some states with their own WARN Acts, the 60-day notice requirement has been temporarily suspended due to COVID-19.
Who is entitled to receive advance notice under the WARN Act?
Hourly and salaried workers as well as their managers and supervisors are entitled to advance notice of a plant closing or mass layoff.
Where a WARN Act notice is required, the written notice must be given to: (1) each representative of the affected employees or to each affected employee if there is no such representative; and (2) to the State dislocated worker unit as well as the chief elected official of the unit of local government where the closing or layoff will occur.
Are there any workers who may not be covered under the WARN Act?
Workers hired for temporary projects or facilities of the business who were hired with the understanding that their employment was limited to the duration of the facility or the project or undertaking are not covered by the WARN Act. Similarly, consultant or contract employees who are paid by another employer or who are self-employed are not covered by the WARN Act.
The law also provides for an exemption or exception to the rule for strikes and lockouts. If the strike or lockout is not intended to evade the requirements of the WARN Act, then an employer will not be required to provide advance notice under the WARN Act. However, if the plant closing or mass layoff occurs for reasons unrelated to the strike or lockout, then the employer is required to provide advance notice. Regardless, non-striking employees as well as workers who are not part of the striking bargaining unit at the same site of employment and employees at other plants which have not been struck will generally be entitled to notice where there are closings or layoffs unless an employer can claim an unforeseeable business circumstance.
Are there any state laws that are similar to the WARN Act?
Many states, including California, New York, Massachusetts, Illinois, and New Jersey have their own state WARN laws (known as “mini-WARN” laws), with varying thresholds and notice periods. Employers are not exempt from fulfilling obligations of the state mini-WARN act simply because it has complied with federal WARN.
For more detailed information concerning the WARN Act, see the United States Department of Labor’s page here.