Worker’s Adjustment and Retraining Notification Act

The WARN Act came into effect on February 4, 1989. The Act mandates all employers that anticipate a plant closing or mass plant layoff to provide a 60 calendar day notice to employees or their representative, the State dislocated worker unit, and the chief elected official of the local government. The advance warning protects employees by providing them time to seek new employment opportunities and to enter skill or training programs which will permit them to become a suitable job candidate in the workforce.

The notice must be submitted in writing and must be delivered by any reasonable delivery process with the objective that the employee will be in receipt of such notice at least 60 days prior to the plant closing or layoff. Notice is not required if the employer transfers the employee to another location within a reasonable commuting distance. Federal, state and local government entities are not covered under the provisions of WARN.

The act covers employers who have 100 or more full-time employees. However, the 100 employees must have worked at least 6 months in the preceding 12 months before the notice is given and cannot be part-time workers that worked an average of less than 20 hours per week. The Act covers employees that are hourly and salaried. Managerial and supervisory employees are also required to be given notice, while business partners are not.

The notice for plant closings is required when it involves 50 or more employees who will lose their jobs during a 30 day period at a single site of employment and such plant closing will last more than 6 months. The notice for layoffs is required when 50 to 499 full-time employees are being laid off for more than a 6 month period and the affected employees consist of 33% of the full-time workforce at a single site of employment. Layoffs of 500 full-time employees or more are covered under the act without applying any percentages.

The Act contains exceptions where less than a 60 day notice may be provided. Proper notice is not required if an employer has to shut down due to an unforeseen circumstance such as a natural disaster. Lock-outs and strikes that are not intended to evade the Act are also part of the exempt circumstances. Not providing a notice for a plant closing is permitted when the employer is seeking new capital in order to stay open and providing such a notice would hinder the new capital opportunity. In any of these situations, the employer has the burden of proof that he has met such conditions and must nevertheless provide a notice to affected employees with an explanation of why there was a shortened notice period.

Violations of the WARN Act come with swift penalties. Employers are liable to their employees for back pay for the period of the violation, or up to 60 days. However, they are not accountable for more than half the number of days the employees was employed. In addition, the employer is subject to a $500 per day penalty for failing to provide proper notice to a required unit of the local government. This penalty can be circumvented if they pay the employee liabilities within 3 weeks after the plant closing or layoff.