The WARN Act

A Quick Guide for Employers and Employees

By: Greg Modd

Navigating the complexities of workforce changes is challenging for employers and employees. The Worker Adjustment and Retraining Notification (WARN) Act is crucial. Enacted in 1988 in the United States, the WARN Act seeks to protect workers and their families by requiring employers to provide notice 60 days before covered plant closings and mass layoffs. This blog post aims to shed light on the key aspects of the WARN Act and its implications for employers and employees.

What is the WARN Act?

The WARN Act is a federal law that protects workers, their families, and communities by requiring employers to provide notice 60 days before covered plant closings and mass layoffs. This notice must be given to affected workers or their representatives (e.g., a labor union), the local government, and the state-dislocated worker unit.

Who is Covered?

The WARN Act covers employers with 100 or more employees, excluding part-time workers. However, it also counts employees who work an aggregate of at least 4,000 hours per week, exclusive of overtime. Covered plant closings occur when a facility or operating unit is shut down for more than six months or when 50 or more employees lose their jobs during a 30-day period. Mass layoffs, on the other hand, involve 500 or more employee terminations or 50-499 employees if they make up at least 33% of the employer’s active workforce.

Exceptions and Special Circumstances

There are exceptions to the WARN Act’s requirements. For instance, if a plant closing or mass layoff results from unforeseeable business circumstances, faltering companies, or natural disasters, the 60-day notice may not be required. However, the employer must still provide as much notice as is practicable.

Employer Responsibilities

Under the WARN Act, employers are required to give written notice to all affected employees. This notice should contain specific information, including the layoff’s expected date, whether permanent or temporary, and the employees’ rights regarding wages, severance, and benefits.

Employee Rights

For employees, the WARN Act provides a period to adjust to the prospective loss of employment, to seek and obtain alternative jobs, and, if necessary, to enter skill training or retraining that will allow these workers to compete in the job market successfully.

Penalties for Non-Compliance

Employers who fail to comply with the WARN Act’s notice requirements may be liable to each affected employee for back pay and benefits for the period of violation, up to 60 days. This liability can be a substantial financial burden for businesses.

The WARN Act is essential for ensuring that employees are treated fairly in the event of significant job losses. Understanding and complying with the WARN Act is crucial for employers to avoid legal pitfalls and maintain a responsible relationship with their workforce. Both employees and employers are encouraged to seek legal counsel for specific advice regarding the WARN Act to ensure compliance and understand their rights and obligations under the law.

Remember: Changes in employment are challenging, but the WARN Act provides a framework for managing them with respect and fairness for all involved.