- The WARN act requires certain employers to provide advance notice of plant closings and mass layoffs.
- If the employer is covered by the WARN act, they must provide at least 60 days’ notice or be penalized.
- WARN is a Federal Law enforceable in U.S. District Court.
The Worker Adjustment and Retraining Notification Act aptly reduces to the acronym WARN—as in “warning of impending layoffs or plant closings.”
WARN was implemented in February 1989 to ensure that business owners provide advance notice of plant closings and mass layoffs to employees as well as to the surrounding community.
Employers are required to provide WARN notices according to the following criteria:
- The employer is a private, for-profit; private, nonprofit; public or quasi-public entity.
- The entity operates in a commercial context and is separately organized from the regular government.
- It retains 100 or more employees.
- Employees who have worked for the company for under six months within the past twelve months are not included in the count.
- Employees who work an average of fewer than 20 hours a week are not included in the count.
- Federal, State, and local government entities providing public services are not required to follow WARN.
An employer must issue written notice 60 calendar days in advance of covered plant closings and mass layoffs. That includes the notification of supervisors and managers, employee representatives, the local chief elected official, and the state dislocated worker unit.
If affected employees do not have the WARN notice in hand by the beginning of the 60-day period, the employer is financially liable at a time when the company is trying to eliminate expenses.
Plant Closing: An employment site or one or more facilities or operating units within an employment site shuts down, resulting in an employment loss of 50 or more employees during any 30-day period.
Mass Layoff: An employer is not engaging in a plant closing but is laying off 500 or more employees of the employment site during any 30-day period. A mass layoff is also defined as 50 to 499 employees laid off in a 30-day period if the employment losses add up to at least 33 percent of the active workforce.
Employment Loss: An employment termination other than discharge for cause, voluntary departure, retirement, layoff exceeding six months, or a reduction in an employee’s hours of more than 50 percent in each month of any six-month period.
There are other reasons an employer must give notice as well as other exceptions to the definition of employment loss. See the US Department of Labor Employment and Training Administration Fact Sheet to learn about them.
Other than the notification, which must meet certain guidelines, there are no record-keeping or reporting requirements laid out in WARN.
Enforcement and Penalties
The Department of Labor Employment and Training Administration (ETA) administers WARN, and the U.S. District Courts enforce the requirements. If an employer fails to provide a 60-day notice, affected employees may be able to seek damages, including benefits and back-pay for up to 60 days, depending on how early the employee received the notification.
Workers, representatives, and local government units may bring individual or class action lawsuits; damages can include reasonable attorney’s fees.
Additionally, an employer that fails to provide the appropriate notice can be fined up to $500 per day of violation unless the liability to each employee is satisfied within three weeks of the plant closing or mass layoff.
Plant closings and mass layoffs should never come as a surprise to anyone, least of all the employees. If any employers are unaware of their financial circumstances, they may find themselves even deeper in debt if they remain ignorant of a federal law, such as WARN.
For handy employer and employee guides, visit the United States Department of Labor Employment and Training Administrations.