Worker Adjustment and Retraining Notification Act (“WARN”)

In 1988 Congress passed the Worker Adjustment and Retraining Notification Act (“WARN”).[1] WARN provides protection to workers, their families and communities by requiring employers to provide notification 60 calendar days in advance of plant closings and mass layoffs. Advance notice provides workers and their families some transition time to adjust to the prospective loss of employment, to seek and obtain alternative jobs and, if necessary, to enter skill training or retraining that will allow these workers to successfully compete in the job market. WARN also provides for notice to State dislocated worker units so that dislocated worker assistance can be promptly provided.[2]

 

WARN applies to employers with more than 100 employees (part-time excluded), or 100 or more employees who in the aggregate work at least 4,000 hours per week. WARN requires at least 60 day notice to employees before plant closings and mass layoffs.[3] Note that under certain circumstances, less than 60 days notice may be permitted.[4] In other words, WARN requires employers who are planning a plant closing or a mass layoff to give affected employees at least 60 days’ notice of such an employment action. While the 60-day period is the minimum for advance notice, this provision is not intended to discourage employers from voluntarily providing longer periods of advance notice. Not all plant closings and layoffs are subject to the Act, and certain employment thresholds must be reached before the Act applies. WARN sets out specific exemptions, and provides for a reduction in the notification period in particular circumstances. Damages and civil penalties can be assessed against employers who violate the Act.[5]

 

A plant closing is defined as “the permanent or temporary shutdown of a single site of employment, or one or more facilities or operating units within a single site of employment, if the shutdown results in an employment loss at the single site of employment during any 30-day period for 50 or more employees excluding any part-time employees”[6]

 

WARN also defines mass layoffs as a reduction in force which (A) is not the result of a plant closing; and (B) results in an employment loss at the single site of employment during any 30-day period for (1) at least 33 percent of the employees (excluding any part-time employees); and at least 50 employees (excluding any part-time employees); or (2) at least 500 employees (excluding any part-time employees)[7]

 

WARN includes two notable exceptions. It does not apply (1) to the closing of a temporary facility or layoffs which are the result of the completion of a particular project and the employees were hired with the understanding that their employment was limited to the duration of the facility or the project, or (2) the closing or layoff constitutes a strike or constitutes a lockout not intended to evade the requirements of WARN.[8]

 

Notice Requirements

Under WARN, notices must be specific. For employees that have a representative, it must contain:

 

(1) The name and address of the employment site where the plant closing or mass layoff will occur, and the name and telephone number of a company official to contact for further information;

 

(2) A statement as to whether the planned action is expected to be permanent or temporary and, if the entire plant is to be closed, a statement to that effect;

 

(3) The expected date of the first separation and the anticipated schedule for making separations;

 

(4) The job titles of positions to be affected and the names of the workers currently holding affected jobs.

 

The notice may include additional information useful to the employees such as information on available dislocated worker assistance, and, if the planned action is expected to be temporary, the estimated duration, if known.[9]

 

For an employee that does not have a representative, notice must be written in language understandable to the employee and contain:

 

(1) A statement as to whether the planned action is expected to be permanent or temporary and, if the entire plant is to be closed, a statement to that effect;

 

(2) The expected date when the plant closing or mass layoff will commence and the expected date when the individual employee will be separated;

 

(3) An indication whether or not bumping rights exist;

 

(4) The name and telephone number of a company official to contact for further information.

 

The notice may include additional information useful to the employees such as information on available dislocated worker assistance, and, if the planned action is expected to be temporary, the estimated duration, if known.[10]

 

Additionally, notice must be provided to the state’s dislocated worker unit and the chief elected official of the local government. This notice must contain:

 

(1) The name and address of the employment site where the plant closing or mass layoff will occur, and the name and telephone number of a company official to contact for further information;

 

(2) A statement as to whether the planned action is expected to be permanent or temporary and, if the entire plant is to be closed, a statement to that effect;

 

(3) The expected date of the first separation, and the anticipated schedule for making separations;

 

(4) The job titles of positions to be affected, and the number of affected employees in each job classification;

 

(5) An indication as to whether or not bumping rights exist;

 

(6) The name of each union representing affected employees, and the name and address of the chief elected officer of each union.[11]

 

Notice may be served by any reasonable method of delivery which is designed to ensure receipt of notice of least 60 days before separation is acceptable (e.g., first class mail, personal delivery with optional signed receipt). In the case of notification directly to affected employees, insertion of notice into pay envelopes is another viable option. A ticketed notice, i.e., preprinted notice regularly included in each employee’s pay check or pay envelope, does not meet the requirements of WARN.[12]

 

Enforcement

Failure to provide the notice to employees subjects the employer to liability to each aggrieved employee and may include compensation for (A) back pay for each day of violation at a rate of compensation not less than the higher of (i) the average regular rate received by such employee during the last 3 years of the employee’s employment; or (ii) the final regular rate received by such employee; and (B) benefits under an employee benefit plan described in section 1002(3) of this title, including the cost of medical expenses incurred during the employment loss which would have been covered under an employee benefit plan if the employment loss had not occurred. Such liability shall be calculated for the period of the violation, up to a maximum of 60 days, but in no event for more than one-half the number of days the employee was employed by the employer.[13] In such an action, the employees are also able to recover their attorney’s fees.[14]

 

Failure to provide the notice to state and local officials includes a civil penalty of not more than $500 for each day of the violation.[15]

[1] 29 USC §§ 2101 et seq.

[2] 20 CFR 639.1

[3] 29 USC § 2102 (a)

[4] 29 USC § 2102 (b)

[5] 20 CFR 639.2

[6] 29 USC § 2101(2)

[7] 29 USC § 2101(3)

[8] 29 USC § 2103

[9] 20 CFR § 639.7

[10] Id.

[11] Id. Note also that the employer may alternatively provide a written notice stating the name of address of the employment site where the plant closing or mass layoff will occur; the name and telephone number of a company official to contact for further information; the expected date of the first separation; and the number of affected employees.

[12] 20 CFR § 639.8

[13] 29 USC § 2104

[14] Id.

[15] Id.

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