If you are a business owner who employs 100 or more workers who have worked more than six months and more than 20 hours a week, you will be subject to the Worker Adjustment and Retraining Notification Act (WARN). This law requires you to provide workers with 60 days of notice in the event that the plant must close or layoff large numbers of workers. All salaried, hourly, managerial, and supervisory employees must be given advance notice of employment issues. The WARN Act is a federal statute, but a plethora of states have implemented similar legislation to apply to workplaces with less than 100 employees.
WARN Act Provisions
When workers are spontaneously laid off without prior notice, they can face enormous financial and emotional hardship. It can take months to find new employment, and depending on the worker’s personal funds, he or she may not have a steady source of income to rely upon. WARN exists to prevent this from occurring and ensure that employees understand that their position will be terminated by a specific date. This will give the worker an adequate amount of time to find new employment.
A plant must adhere to WARN regulations if it is going close for a period of more than six months, or if 50 or more employees will lose their jobs during a single 30-day period. Mass layoffs occur when 500 or more workers are laid off for a period of six or more months, or if at least 33 percent of the workforce is scheduled to be laid off.
If an employer temporarily closes a facility or engages in business activities when the workers were hired for the duration of the activities, WARN will not be enforced. WARN will also be enforced for a period of fewer than 60 days if the layoff results from a natural disaster or unpredictable business circumstances.
If an employer does not provide notice to the state government, he or she will be fined a daily amount of $500 for each day that the act is violated. This penalty can be avoided if the employer meets the WARN provisions for all employees up to three weeks after the closing or layoff. WARN is enforced through district courts, and both workers and government officials may file class action lawsuits against a violating employer. The court will be allowed to award legal fees as part of the final judgment.
The phrase “employment loss” is extremely relevant when it comes to WARN. “Employment loss” refers to the following issues:
- An involuntary termination of employment for which the employee is not at fault
- A layoff that lasts more than 6 months in duration
- A 50 percent or more reduction in an employee’s working hours over a 6 month period of time
If an employee elects to not transfer to a different employment facility within reasonable commuting distance, the company does not suffer employment loss. If the employee accepts a transfer outside of commuting distance within 30 days of a mass layoff, no employment loss has occurred. It is important that you communicate transfer options when informing employees of an impending layoff or closing.
When issuing a notice of closing, it is acceptable to use any form. Some employers choose to issue a written notice while others prefer a verbal notice. As long as the notice is given 60 days prior to the layoff, it will be acceptable. Further requirements for the provisions of this notice are listed in section 639.7 of the WARN regulations.
Every business with a 100 or more employees is responsible for understanding the main components of the WARN act. This act has many different facets and can be difficult to comprehend at times. For this reason, you should consider consulting an attorney who specializes in employment law if you need further clarification.
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