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Requirements of the Worker Adjustment and Retraining Notification Act (WARN) Act

Employers Must Follow WARN Act Requirements in Layoffs and Plant Closings

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The Worker Adjustment and Retraining Notification Act (WARN Act) offers: "protection to workers, their families and communities by requiring employers to provide notice 60 days in advance of covered plant closings and covered mass layoffs. This notice must be provided to either affected workers or their representatives (e.g., a labor union); to the State dislocated worker unit; and to the appropriate unit of local government."

The WARN Act requires 60 days written notice of the intention to lay off more than 50 employees during any 30-day period as part of a plant closing. The notice must be provided to employees, the State dislocated worker unit and the chief elected official of the unit of local government in which the employment site is located, and any collective bargaining unit. (This does not consider the layoff of employees who have worked for the employer less than 6 months in the past 12 months or employees who work, on average, less than 20 hours a week.)

Additionally, the WARN Act requires employers to give notice of any mass layoff, that does not result from a plant closing, but will result in an employment loss of 500 or more employees during any 30-day period. The Act also covers employment loss for 50-499 employees if they make up at least 33% of the employer's active workforce. (This does not consider the layoff of employees who have worked for the employer less than 6 months in the past 12 months or employees who work, on average, less than 20 hours a week.)

Under WARN Act provisions, an employer who orders a plant closing or mass layoff without providing this notice is liable to each unnotified employee for back pay and benefits for up to 60 days during which the employer is in violation of the WARN Act. (The employer's liability may be reduced by the amount of any wages or unconditional payments paid to the employee during the violation time period.)

The employer who fails to provide this notice to the implicated local government is charged a civil penalty of up to $500 for each day the employer violates notification requirements. This penalty can be avoided if the employer pays each affected employee within 3 weeks after the plant closing or layoff.

In a personal story, I was forced to lay off 26 employees (non-union) during a potential client bankruptcy situation. No sooner did the laid off employees hit the unemployment offices in the state than the WARN Act officials were on the phone to me. Employees told their tales of woe to the unemployment compensation office workers and predicted that we would shortly close the company. The front line workers notified their supervisors who notified the state.

I was able to tell the WARN Act officials that we had not, and did not intend to violate the WARN Act. But, the experience was a lesson in how quickly our state reacted to a former employee-spread rumor. Since I know you'll want to hear the end of the story, the short-term cuts helped save the company which is thriving today. No additional employee layoffs were required.

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