Worker Adjustment and Retraining Notification Act (WARN)
Congress enacted WARN in 1989 to provide some protection to workers, their families, and communities faced with plant closings or mass layoffs. The advance notice requirement helps give workers and their families time to adjust to the prospective loss of employment, to seek and obtain other jobs, or to pursue skill training options to help the worker compete successfully in the job market. WARN also provides for notice to state dislocated worker units so that the state can promptly offer the affected workers assistance. With the exception of business partners, all workers, including management and supervisors, are protected by WARN (unless one of the exemptions discussed below applies).
- Under federal law, covered employees must be notified 60 calendar days in advance of plant closing or mass layoffs.
- Employers must also notify state-level dislocated worker offices so that these offices can quickly provide help to the newly unemployed workers.
- The law does not dictate a particular form for the notice nor require any particular content. However, it does require that the notice must be such that it is reasonably calculated to reach the affected workers and that it be continually updated within the 60-day period as events warrant.
- In sale-of-business situations, the following requirements must be met:
- Either the old owner/employer or the new owner/employer must give notice of the change.
- If the transaction results in a plant closing or mass layoff, then specific required parties (see last bullet point below) must be given 60 days notice. No notice is required if the sale does not result in a plant closing or mass layoff.
- The seller is required to provide the 60 days notice for plant closings and mass layoffs up to and including the date of sale.
- The buyer is responsible for notice after the date of sale.
- For purposes of WARN notification, employees of the seller who have worked at least 6 months of the last 12 and/or who work more than 20 hours a week on average become employees of the buyer immediately following the sale.
- Covered Employees include not only hourly and salaried workers but also managerial and supervisory employees.
- Mass Layoffs include:
- A layoff of 6 months or longer that affects 500 or more workers.
- If the layoffs are at a company with between 50 and 499 employees, then a mass layoff is one that affects 33% of the workforce.
- The time frame for counting layoffs is 30 days.
- Plant Closing Layoffs include:
- A 6 month or greater shut-down of a facility or operating unit.
- A situation where 50 or more employees lose their jobs within a 30-day period at a single work site.
- If the number of layoffs in one group is insufficient to meet the threshold requirements in a 30-day period but layoffs in two or more groups added together meet the threshold requirements in a 90-day period, a plant closing or mass layoff has occurred, and notification is required. The employer may get around this requirement if it can be demonstrated that the layoffs during that period had separate and distinct causes.
- WARN does not apply to the closing of temporary facilities.
- Employers are not required to notify strikers or workers involved in collective bargaining units in labor negotiations that lead to lockout when the strike or lockout is equivalent to a plant closing or mass layoff. Non-striking workers in this situation are still entitled to notice.
- Completion of an activity when workers were only hired for the duration of the activity does not trigger the notification requirements.
- Less than 60 days notice is acceptable in the following circumstances:
- Closing of a company known to be faltering.
- Closing due to unforeseen business circumstances.
- Closing due to natural disaster.
Filing Requirements and Limitations:
- No administrative filing is required prior to filing a civil suit for WARN violations.
- Federal courts will use the closest state action's statute of limitations.
- The law covers businesses with at least 100 employees, whether profit or non-profit.
- It also covers public and quasi-public entities with the requisite number of employees so long as they are operating in a commercial context and are organized separately from the government.
- WARN does not apply to federal, state and local government entities which provide public services.
Remedies and Damages:
- Back Pay
- This is the most common form of relief.
- It includes wages, salary, and fringe benefits the claimant would have received for a period of 60 days.
- This may be reduced by the period of time after which notice was given. For example, if your employer gave you 28 days notice, then the court may only award 32 days of back pay.
- Attorney's Fees
- The court may choose to award attorney's fees to the prevailing, or winning, party.
- Punitive Damages
- Failure to provide notice to the local government units will result in a possible civil penalty of up to $500 a day for each day of the violation.
- The employer can avoid this penalty by satisfying any liability to employees within 3 weeks after the closing or layoff.