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 non-profit 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 Non-Compliance
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.
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.