In effect since 1989, the Worker Adjustment and Retraining Notification (WARN) Act protects workers, their families and communities. To that end, it requires employers to give notice 60 days in advance of plant closings and mass layoffs under certain circumstances.
The advance notice outlined by the WARN Act helps workers and their families plan for and adjust to a loss of employment. The WARN Act requirements give workers some time to search for a new job, and if needed, enroll in workforce training.
Given the widespread local impact resulting from many families becoming suddenly unable to purchase goods and services, the advance notice also helps communities cope with large-scale job loss.
Because the law is federal, businesses across the U.S. must comply with WARN Act regulations. Failure to comply incurs considerable legal and financial repercussions for the company.
For these reasons, the WARN Act is the most important regulation to consider before moving ahead with a mass layoff or plant closing. Given the many factors to consider, however, it’s advisable to consult outside legal counsel to ensure your organization is fully compliant.
To get you better acquainted with the fundamentals, however, here’s what you need to know about the federal WARN Act.
The act requires employers to provide 60 days of written notice in the event of a layoff of more than 50 employees during any 30 days as part of a plant closing.
Per the U.S. Department of Labor, the notice must be provided to:
For companies with work sites in more than one location, all relevant entities for each site must be notified.
There’s no format to follow when creating a WARN notice.
However, besides being presented it writing, it should never be included with other notices about company matters. Providing a WARN notice using a communications channel normally used for other regular company business is insufficient.
If your organization, for example, includes written communications about workplace issues with employee paychecks, employees may not pay attention to material received in a typical delivery method.
To be compliant, a WARN notice typically includes:
In addition to employees and within the same 60-day notice timeline, a WARN Act notification is sent to:
Because of the many individuals and entities who must be contacted, it’s wise to include WARN notifications as part of your mass layoff or plant closing checklist.
In general, the WARN Act applies to companies with over 100 full-time employees and all publicly and privately held companies. Both nonprofit and for-profit organizations are expected to comply.
For companies that fit those criteria, all hourly and salaried workers (including managerial and supervisory staff) are entitled to WARN Act notifications.
Business partners are not entitled to the notices.
The federal WARN Act does not apply in cases where employees:
Other special exemptions to the WARN Act include:
In the event of a strike, there are other factors to consider:
There are also three noteworthy exceptions related to the 60-day notice window. These instances include when:
In such extreme cases, notices may be given after the event – but they must be made as soon as possible. Moreover, the employer must provide an additional statement in the notices about the why the 60-day notification requirement isn’t being met.
Many individual states have specific laws (referred to as “mini-WARN acts”) that build upon federal regulations.
Various states have additional regulations about which employers should be aware. This information usually can be found via a state’s labor department.
Although these state-level regulations do typically build upon the federal guidelines, they sometimes go farther. For instance, California extends worker protections to a wider range of employees. Meanwhile, New Jersey now requires advanced notice and severance pay under certain circumstances.
Cities, too, may have requirements. In Philadelphia, for example, businesses with 50 or more employees must submit a letter to the city’s director of commerce.
Failure to comply can be costly.
An employer who violates the WARN requirements by ordering a plant closing or mass layoff without providing appropriate notice is liable to each eligible employee for an amount including back pay and benefits for the period of violation, up to 60 days.
An employer who fails to provide notice as required to local government officials is also subject to a civil penalty up to $500 for each day of violation.
The United States district courts enforce WARN Act requirements in the impacted jurisdiction and can require payment of all attorney fees in a court ruling. Workers, representatives of employees and local government officials may bring individual or class action suits against an organization for violations.
If you look at stressful life events, losing your job comes in second after the death of a loved one. Doing the right thing for your people is always the best approach to take with your workforce – especially at a difficult time in the company’s own life cycle.
Approach a reduction in force as a thoughtful leader. Some suggestions:
Informing employees why layoffs are necessary, either individually or in groups, helps employers prevent alienating both the workers who are leaving and the ones remaining.
Mishandle the layoff process, however, and disgruntled employees could spread the news to customers, future employees and the media alike, compounding the hassles of shutting down a site or plant.
To learn more about regulatory compliance, download our complimentary e-book: HR compliance: Are you putting your business at risk?
