Employer Law Newsletter
The Worker Adjustment and Retraining Notification Act (WARN Act) requires employers to provide at least 60 days notice to affected workers or their representatives, the state's dislocated worker units and the appropriate local government unit prior to covered plant closings and covered mass lay-offs.
- Plant closings covered by the Act are those that occur when an entire employment site or one or more facilities within an employment site will be shut down, resulting in at least 50 employees losing employment for a minimum of 30 days.
- Mass lay-offs covered by the Act occur when at least 500 employees lose employment from an employment site during any 30 day period. If 50-499 employees lose employment and they account for at least 33% of the workforce, this also meets the definition of a mass lay-off under the WARN Act.
Additionally, if there are employment losses for two or more groups of workers, each of which individually is under the threshold numbers to count as a covered plant closing or mass lay-off, the groups' numbers can be added together to meet the threshold requirement. The only time the two or more groups cannot be added together is if the employer is able to prove that the employment losses in these groups resulted from separate and distinct actions and causes.
According to the WARN Act, an employment loss includes:
- Termination of employees for reasons other than discharge with cause, voluntary departure or retirement
- Lay-offs lasting more than 6 months
- Reduction in employee work hours by more than 50% in each month of any six month period of time
Certain types of job transfers do not qualify as employment loss under the WARN Act, such as employees who refuse to transfer to different employment sites that are within a reasonable commuting distance from the current place of employment.
Only those employers with 100 or more employees are required to adhere to the WARN Act. Employees who have worked less than 6 months within the last 12 months or who average less than 20 hours of work per week are not counted towards the threshold requirements under the Act. Employers covered by the WARN Act include public and quasi-public employers; private employers of for-profit and nonprofit businesses; and federal, state and local government agencies, except for those that provide public services.
While there is no specific form that employers must use to provide notice to employees or their representatives (such as a labor union rep) about a plant closing or mass lay-off, the notice must be in writing, be specific and reach the intended recipients at least 60 days prior to the closing or lay-off. Limited exceptions exist to the 60 day requirement in instances of faltering companies, unforeseeable business circumstances and natural disasters.
Employers are not required to provide WARN Act notices when they close a temporary facility or when a project is completed and will result in a plant closing or mass lay-off. However, in order for these exemptions to be applicable, the employees must have been hired with the understanding that their employment was limited. Employers are not allowed to label certain projects as temporary when in fact they actually are on-going projects in order to avoid their obligations under the WARN Act.
Employers who violate the Act may be forced to pay penalties, including paying each employee who should have received notice back pay and benefits for the period of time the employer failed to provide notice, or 60 days, whichever is longer.
For more information on your obligations under the WARN Act, or for assistance drafting a proper notice, contact an experienced employment law attorney in your area today.
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