Layoffs/WARN Act

In addition to unemployment insurance benefits, the law provides protection to certain types of employees in case of unemployment. Under the Worker Adjustment and Retraining Notification Act (WARN Act), most employers that have 100 or more employees must give 60-day advance written notice of covered plant closings and covered mass layoffs.

In general, your employer must time the notice so that it reaches you 60 days before the closing or layoff date. The exceptions are when your employer is a “faltering company,” in the case of unforeseeable business circumstances, and in the event of a natural disaster. The requirement of 100 or more employees does not count employees who have worked for fewer than six of the last 12 months, and it does not count employees who work fewer than 20 hours per week.

Private employers as well as public and quasi-public employers in a commercial context are covered employers. Ordinary federal, state, and local government entities offering public services are not covered.

The WARN Act is intended to give workers and families time to adjust to losing the income from employment, get another job, and enter any needed skills training or retraining programs. Managers, supervisors, hourly wage workers, and salaried workers are covered by the WARN Act, as are labor unions, locally elected chief officials, and state dislocated worker units.

You should be aware that an employer doesn’t need to give notice if it is permanently replacing someone who meets the definition of “economic striker” as defined under the National Labor Relations Act, which governs unions. The WARN Act doesn’t require notice to strikers or those involved in labor negotiations leading to a lockout when the strike or lockout is equivalent to a plant closing or mass layoff. However, non-striking employees who experience an employment loss because of a strike or workers not part of the bargaining units that are involved in labor negotiations leading to a lockout must still be given notice.

How is WARN Enforced?

Workers, unions, or other representatives of employees, as well as units of local government, can bring individual or class action lawsuits in federal court. This means that if you believe your employer laid you off in violation of the WARN Act, you may be able to bring a lawsuit to enforce the Act. If you are successful in the lawsuit, your employer will have to pay back pay and benefits for the period in violation. This liability may be lessened by any wages or voluntary and unconditional payments made by the employer to you. Your employer may also be subject to a civil penalty.

What Triggers Notice for a Plant Closing or Mass Layoff?

Employment losses that meet a certain threshold trigger the notice requirement. An employment loss is an involuntary termination of employment not for cause or retirement. It can also be a layoff that is more than six months or a reduction in job hours of more than 50% during each month of a six-month period. There are a number of situations that may be stressful to you but do not count as a layoff.

For example, if your employer offers you a transfer to another employment site to which you could reasonably commute, with less than a six-month break in your employment, you may be reluctant to take it. If you refuse to be transferred, you do not have an employment loss covered by the WARN Act. Similarly, if you do take the offer within 30 days after it is offered or within 30 days of the plant closing or mass layoff, you have not experienced an employment loss under the WARN Act.

For purposes of giving WARN Act notice of a plant closing, a covered employer has to give notice when its intended closure of a site of employment or facility will lead to employment loss for 50 or more employees during a 30-day period. The requirement of 50 employees doesn’t count employees who have worked for fewer than six of the 12 prior months or employees working fewer than 20 hours per week. However, these part-time or more recent employees require notice as well.

Mass layoffs also require notice, even when they do not arise from a plant closing. A mass layoff under the WARN Act is defined as an event that leads to a loss of jobs for 500 or more employees, or between 50 and 599 employees when they make up at least 33% of the employer’s active workforce. As with plant closings, this doesn’t count employees working for fewer than six out of the 12 prior months or employees working fewer than 20 hours per week. As with plant closings, part-time or more recent employees also require notice.

What if the number of employment losses does not meet the threshold requirements of a plant closing or mass layoff? Employees must give notice anyway if the number of employment losses for two or more groups of workers, each smaller than the minimum required for notice, reaches the threshold level of either a plan closing or a mass layoff during a 90-day period. Job losses in a 90-day period count towards a WARN threshold unless the employer is able to show that these losses arose from separate and distinct actions and causes.