WARN Act

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The Purpose Of The WARN Act

The WARN Act of 1988 was created to protect the continuity of working families and communities. The aim of the act is to ensure workers are provided with sufficient time to seek alternate employment or retraining before losing their job.

Businesses Subject To the WARN Act

The WARN Act applies to all U.S. for-profit businesses, private nonprofit organizations, or quasi-public entities separately organized from the regular government with:

100 or more full-time workers not counting those who work less than 20 hours per week or those who have been employed for less than 6 months.
100 or more workers who combined work a minimum of 4,000 hours per week.

Businesses can find out more about the act and qualification criteria in the Department of Labor's WARN Act Employer's Guide.

Circumstances when WARN Act Notice is Required

WARN Act Notice is required when:

An employer reduces the hours of work of 50 or more workers by more than half.
An employer closes a facility either temporarily or permanently which affects at least 50 workers (excluding part-time workers).
An employer closes an operating unit which may affect fewer than 50 workers but results in more than 50 workers losing their jobs (excluding part-time workers).
An employer lays off 500 or more workers at a single site during a 30-day period (excluding part-time workers).
Temporary layoffs of less than 6 months which have been extended for more than 6 months.

Employees Protected By The WARN Act

Workers protected by the WARN Act include full-time and part-time salaried employees including those in managerial and supervisory positions. This also includes workers on sick leave, annual leave, or worker's compensation leave.

If your employer meets the requirements of the WARN Act, you are entitled to 60-days written notice if:

You are terminated from your employment.
You are laid off for more than 6 months.
If you have your regular hours reduced by more than half for each month for a period of 6 months or more.

Employees Not Protected by the WARN Act

Employees working for businesses with less than 100 full-time workers.
Federal, state, or local government employees.
Strikers or employees who have been locked out.
Employees who quit, retire, or are discharged for due cause.
Employees who were hired to work on temporary projects or facilities.
Consultants and contract employees.
Employees offered a transfer to a job within a reasonable commuting distance.

Workers can find out more about employee qualification criteria in the Department of Labor's WARN Act Worker's Guide.

Exceptions To The WARN Notice Requirement

There are four exceptions to the full 60-day WARN Notice requirement. In such cases, notice must be given as soon as possible and the employer must provide a statement for such reasons. The four exceptions include:

If a plant closes or there is a mass layoff as a direct result of a natural disaster including a storm, drought, earthquake, tornado, or similar effects of nature.
If a business could not reasonably foresee the circumstances that led to a mass layoff or plant closure. This includes circumstances caused by sudden and dramatic action outside of the employer's control.
When a faltering company is actively seeking capital or business which would postpone or avoid plant closures or layoffs. This is provided that the company reasonably believes that any advanced notice would hurt its ability to obtain the business or capital it needs to continue operating.
If an employer closes a temporary facility or completes a temporary project as long as the employees were hired with the understanding that the work would be temporary.

Who Must Recieve Notice

According to the WARN Act, an employer must give written notice to unrepresented employees, bargaining agents, or representatives of employees who may be expected to lose their jobs. The notice must contain:

A detailed explanation of whether the closing or layoff is permanent or temporary.
The date of layoff/closing and the date of employee separation.
Details of employee bumping rights.
The name and contact information of a company representative who can provide additional information about the layoffs.

WARN Act Enforcement

The U.S. Department of Labor has no authority or legal standing in any enforcement action relating to the WARN Act. The Act is enforced through the U.S. District Courts.

Employees, union representatives, and units of local government may bring individual or class action suits against employers who violate the WARN Act. Visit the DOLs WARN Advisor site to find out more.

Penalties for Noncompliance

Any qualifying employer who violates the provisions set out by the WARN Act is liable to pay each employee for the full period of violation up to 60 days, including back pay and benefits.

The employer's liability may be reduced by any wages or voluntary payments paid by the employer during this period. Additionally, any employer who fails to provide notice to a unit of local government is subject to a civil penalty not exceeding the amount of $500.00 for each day of violation.

This penalty may be avoided if the employer is able to satisfy the liability to each employee within 3 weeks after the closing or layoff is ordered.

Sale of a Business

If plant closures or mass layoffs occur when all or part of a business is sold, the WARN Act still applies. The seller or buyer is responsible for providing WARN notice depending on when the sale occurs.

The seller is responsible for giving notice if the closure or layoffs occur before the sale becomes effective. The buyer is responsible for giving notice if the closer or layoffs occur after the sale becomes effective.

Bankruptcy

The WARN Act still applies if an employer declares bankruptcy in certain situations. WARN notice is required if:

The employer knows about the layoffs or plant closures before filing for bankruptcy.
When an employer continues to run a business into bankruptcy as a debtor in possession.

Notice is not required when a bankruptcy trustee is liquidating a business.

FAQs:

What is the WARN Act?

The Worker Adjustment and Retraining Notification (WARN) Act is a U.S. Federal Labor Law requiring certain businesses to provide at least 60 days written notice in the event of a plant closure or mass layoff.

Which businesses are subject to the WARN Act?

The WARN Act applies to all U.S. for-profit businesses, private nonprofit organizations, or quasi-public entities separately organized from the regular government with:

100 or more full-time workers not counting those who work less than 20 hours per week or those who have been employed for less than 6 months.
100 or more workers who combined work a minimum of 4,000 per week.

When is a business required to provide a 60-day WARN Act notice?

When an employer reduces the hours of work of 50 or more workers by more than 50%.
When an employer closes a facility either temporarily or permanently which affects at least 50 workers (excluding part-time workers).
When an employer closes an operating unit which may affect fewer than 50 workers but results in more than 50 workers losing their jobs (excluding part-time workers).
When an employer lays off 500 or more workers at a single site during a 30-day period (excluding part-time workers).
When temporary layoffs of less than 6 months which have been extended for more than 6 months.

When is a business exempt from the WARN Act 60-day notice?

If plant closures or mass layoffs come as a direct result of a natural disaster.
If a business could not reasonably foresee the circumstances that led to a mass layoff or plant closure.
When a faltering company is actively seeking capital or business which would postpone or avoid plant closures or layoffs.
If an employer closes a temporary facility or completes a temporary project as long as the employees were hired with the understanding that the work would be temporary.

Which Employees are not protected by the WARN Act?

Employees working for businesses with less than 100 full-time workers.
Federal, state, or local government employees.
Strikers or employees who have been locked out.
Employees who quit, retire, or are discharged for due cause.
Employees who were hired to work on temporary projects or facilities.
Consultants and contract employees.
Employees offered a transfer to a job within a reasonable commuting distance.

Can an employee waive the right to notice under the WARN Act?

Yes, while employers cannot legally require their employees to waive notice, they may ask them to sign a document waiving their rights to make claims against the company in lieu of financial compensation.

Are part-time workers entitled to receive WARN notice?

Yes, while part-time workers do not count when determining if plant closures or mass layoffs have occurred, they are still entitled to WARN notice if there is one.

Who Enforces the WARN Act?

The WARN Act is enforced through the U.S. District Courts. Employees, union representatives, and units of local government may bring individual or class action suits against employers who violate the WARN Act.

What are the penalties for noncompliance of the WARN Act?

Any employer who violates the provisions set out by the WARN Act is liable to pay each employee for the full period of violation up to 60 days, including back pay and benefits.

Additionally, any employer who fails to provide notice to a unit of local government is subject to a civil penalty not exceeding the amount of $500.00 for each day of violation.

Who must receive WARN Act Notice?

Written notice must be given to unrepresented employees, bargaining agents, or representatives of employees who may be expected to lose their jobs.

Does the WARN Act apply if a business is sold?

Yes, WARN notice is required by either the buyer or seller, depending on when the closure or layoffs were instituted.

Does the WARN Act apply if a business files for bankruptcy?

Yes, there are some instances when an employer must give WARN notice even if they file for bankruptcy. Notice must be given if:

The employer knows about the layoffs or plant closures before filing for bankruptcy.
When an employer continues to run a business into bankruptcy as a debtor in possession.

Does the WARN Act apply when there is a pandemic?

Businesses may be exempt from issuing a full 60-day WARN notice in certain circumstances. The WARN Act does allow for exemption if a business could not reasonably foresee circumstances that led to a plant closing or mass layoffs. In such cases, the reduction of a healthy workforce due to quarantine may apply.