The WARN act

HOW WARN PROVIDES ASSISTANCE

The WARN Act requires employers to provide written notice at least 60 calendar days in advance of covered plant closings and mass layoffs (see glossary). An employer's notice assures that assistance can be provided to affected workers, their families, and the appropriate communities through the State Rapid Response Dislocated Worker Unit (see glossary). The advance notice allows workers and their families transition time to seek alternative jobs or enter skills training programs.

Upon receipt of a WARN notice, the State Rapid Response Dislocated Worker Unit coordinates with the employer to provide on-site information to the workers and employers about employment and retraining services that are designed to help participants find new jobs. These services may include:

• Labor market information (occupational information and economic trends)
• Job search and placement assistance
• On-the-job training
• Classroom training
• Entrepreneurial training
• Referral to basic and remedial education

EMPLOYERS REQUIRED TO PROVIDE WARN NOTIFICATION

A WARN notice is required when a business with 100 or more full-time workers (not counting workers who have less than 6 months on the job and workers who work fewer than 20 hours per week) is laying off at least 50 people at a single site of employment (see glossary and FAQs), or employs 100 or more workers who work at least a combined 4,000 hours per week, and is a private for-profit business, private non-profit organization, or quasi-public entity separately organized from regular government.

EMPLOYEES PROTECTED BY WARN

Affected employees are those who may be expected to experience an employment loss (see glossary). They may be hourly and salaried workers, including managerial and supervisory employees and non-strikers. Affected employees (see glossary) include:

• Employees who are terminated or laid off for more than 6 months or who have their hours reduced 50% or more in any 6-month period as a result of the plant closing or mass layoff;
• Employees who may reasonably be expected to experience an employment loss as a result of a proposed plant closing or mass layoff. If the employer has a seniority system that involves bumping rights (see glossary and FAQs), the employer should use its best efforts to give notice to the workers who will actually lose their jobs as a result of the system. If that is not possible, then an employer must give notice to the incumbent in the position being eliminated;
• Workers who are on temporary layoff but have a reasonable expectation of recall; this includes workers on workers' compensation, medical, maternity, or other leave; and
• Part-time workers (see glossary). (These workers do not count when determining whether there has been a plant closing or mass layoff but they are entitled to receive WARN notice if there is one.)

EMPLOYEES NOT PROTECTED BY WARN

The following employees are not be protected under WARN:

• Strikers, or workers who have been locked out in a labor dispute;
• Workers working on temporary projects or facilities of the business who clearly understand the temporary nature of the work when hired;
• Business partners, consultants, or contract employees assigned to the business but who have a separate employment relationship with another employer and are paid by that other employer, or who are self-employed; and
• Regular federal, state, and local government employees.

EMPLOYEES NOT COUNTED UNDER WARN

When determining whether or not your company's layoff or plant closing falls within the WARN requirements, the following employees are not counted:

• Part-time workers;
• Workers who retire, resign, or are terminated for cause;
• Workers who are offered a transfer to another site of employment within a reasonable commuting distance (see FAQs) if:
  
  • The closing or layoff is a result of a relocation or consolidation of all or part of the employer's business; and
  • The transfer involves no more than a 6-month break in employment.
• Workers who are offered a transfer to another site of employment outside of a reasonable commuting distance if:
  
  • The closing or layoff is a result of a relocation or consolidation of all or part of the employer's business;
  • The transfer involves no more than a 6-month break in employment; and
  • The worker accepts the offer within 30 days of the offer or the closing or layoff, whichever is later.

CIRCUMSTANCES THAT TRIGGER WARN

WARN is triggered when a covered employer:

• Closes a facility or discontinues an operating unit(see glossary) permanently or temporarily, affecting at least 50 employees, not counting part-time workers, at a single site of employment. A plant closing also occurs when an employer closes an operating unit that has fewer than 50 workers but that closing also involves the layoff of enough other workers to make the total number of layoffs 50 or more;
• Lays off 500 or more workers (not counting part-time workers) at a single site of employment during a 30-day period; or lays off 50-499 workers (not counting part-time workers), and these layoffs constitute 33% of the employer's total active workforce (not counting part-time workers) at the single site of employment;
• Announces a temporary layoff of less than 6 months that meets either of the two criteria above and then decides to extend the layoff for more than 6 months. If the extension occurs for reasons that were not reasonably foreseeable at the time the layoff was originally announced, notice need only be given when the need for the extension becomes known. Any other case is treated as if notice was required for the original layoff; or
• Reduces the hours of work for 50 or more workers by 50% or more for each month in any 6-month period. Thus, a plant closing or mass layoff need not be permanent to trigger WARN.

CIRCUMSTANCES THAT DO NOT TRIGGER WARN

WARN is not triggered when a covered employer:

• Closes a temporary facility or completes a temporary project, and the employees were hired with the clear understanding that their employment would end with the closing of the facility or the completion of the project; or
• Closes a facility or operating unit due to a strike or lockout and the closing is not intended to evade the purposes of the WARN Act.

WARN is also not triggered when the following various thresholds for coverage are not met:

• If a plant closing or mass layoff results in fewer than 50 people losing their jobs at a single site of employment;
• If 50-499 workers lose their jobs and that number is less than 33% of the employer's total active workforce at a single site;
• If a layoff is for 6 months or less; or
• If work hours are not reduced 50% in each month of any 6-month period.

CALCULATING THE TIMEFRAME TO DETERMINE WHEN WARN NOTICE IS REQUIRED

WARN looks at the employment losses that occur over a 30-day period. For example, if an employer closes a plant which employs 50 workers and lays off 40 workers immediately, and then lays off the remaining 10 workers 25 days later, that is a covered plant closing.

WARN also looks at the employment losses that occur over a 90-day period. An employer is required to give advance notice if it has a series of small terminations or layoffs, none of which individually would be covered under WARN but which add up to numbers that would require WARN notice. An employer is not required to give notice if it can show that the individual events occurred as a result of separate and distinct actions and causes and are not an attempt to evade WARN.

The Preamble to the WARN Act regulations gives an example of 90-day aggregation. It suggests that an employer should look ahead and behind 90 days to determine whether separate but related events would trigger coverage. Below is a specific example of a situation in which 90-day aggregation might apply under WARN.

• DAY 1 Company has 180 employees
• DAY 2 Company terminates 30 employees
  
  • (150 is now the number for WARN computations)
• DAY 31 Company terminates 29 employees
  
  • (now 121 remaining employees)
• DAY 60 Company terminates 6 employees
  
  • (115 remaining employees)
• DAY 90 Company terminates 5 employees
  
  • (110 remain)

Assuming no notice was given, the company is liable to all 70 employees who were terminated because the mass layoff threshold has been reached through separate actions that did not occur for separate and distinct causes within this 90-day period. All employees terminated within the 90 days have suffered a mass layoff and are entitled to 60 days' notice before the date of termination. For this purpose, the date on which the company size is measured is Day 1. (Note that aggregation periods are rolling and the second layoff starts a second 90-day period where the applicable workforce is 121 workers.)

EXCEPTIONS TO THE 60-DAY NOTICE

There are three exceptions to the full 60-day notice requirement. However, notice must be provided as soon as is practicable even when these exceptions apply, and the employer must provide a statement of the reason for reducing the notice requirement in addition to fulfilling other notice information requirements. The exceptions are as follows:

• Faltering company: When, before a plant closing, a company is actively seeking capital or business and reasonably in good faith believes that advance notice would preclude its ability to obtain such capital or business, and this new capital or business would allow the employer to avoid or postpone a shutdown for a reasonable period;
• Unforeseeable business circumstances: When the closing or mass layoff is caused by business circumstances that were not reasonably foreseeable at the time that 60-day notice would have been required (i.e., a business circumstance that is caused by some sudden, dramatic, and unexpected action or conditions outside the employer's control, like the unexpected cancellation of a major order); or
• Natural disaster: When a plant closing or mass layoff is the direct result of a natural disaster such as a flood, earthquake, drought, storm, tidal wave, or similar effects of nature. In this case, notice may be given after the event.

CONTENTS OF THE NOTICE TO EMPLOYEES WHEN NOT REPRESENTED

Notice to individual employees must be written in clear and specific language that employees can easily understand and must contain at a minimum the following requirements:

• 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;
• The expected date when the plant closing or mass layoff will commence and the expected date when the individual employee will be separated;
• An indication as to whether or not bumping rights (see FAQs) exist; and
• 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 available dislocated worker assistance, and, if the planned action is expected to be temporary, the estimated duration, if known.

CONTENTS OF NOTICE TO THE DISLOCATED WORKER UNIT AND THE LOCAL CHIEF ELECTED OFFICIAL

Advance notice should be given to the State Rapid Response Dislocated Worker Unit as well as to the chief elected official of the local government where the closing or mass layoff is to occur. If there is more than one such unit, the "tiebreaker" is the local government to which the employer paid the most taxes in the preceding year. However, if many affected employees live in nearby local government jurisdictions, it is also helpful to provide notice to those additional local governments so that coordinated planning of services for those employees to be laid off may begin quickly.

Notice to the State Rapid Response Dislocated Worker Unit and the local chief elected official must contain at a minimum:

• The name and address where the mass layoff or plant closing is to occur, along with the name and telephone number of a company contact person who can provide additional information;
• An explanation of whether the employment loss will be temporary or permanent, and whether the entire plant is being closed;
• The expected date of the first job losses, along with a schedule of any further employment reductions;
• The job titles of positions that will be affected and the number of affected employees in each job category;
• A statement of bumping rights, if any exist; and
• The name of each union/employee representative and the name and address of the chief elected officer of each union.

The WARN regulations also allow employers to provide alternative notice to the State Rapid Response Dislocated Worker Unit and the chief local elected official. The alternative form must be a written notice that provides the following information:

• The name and 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 separation; and
• The number of affected employees.

Employers who choose to provide the alternative form of notice must keep accessible all other information outlined above and provide it to the State Rapid Response Dislocated Worker Unit and local government upon request. Any failure to provide this additional information will be deemed a failure to give required WARN notice.

WHAT THE NOTICE TO THE UNION REPRESENATIVE MAY CONTAIN

Notice to the bargaining agent/chief elected officer of each affected union or local union official must contain at a minimum the following information:

• The name and address where the mass layoff or plant closing is to occur, along with the name and telephone number of a company contact person who can provide additional information;
• 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;
• The expected date of the first separation and the anticipated schedule for making separations; and
• The job titles of positions to be affected and the number of affected employees in each job classification.

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

DATES OF TERMINATION/LAYOFF

The WARN regulations recognize that it may not always be possible to identify, 60 days in advance, the exact date a termination or layoff will occur. WARN notice may identify a two-week (14-day) period during which terminations/layoffs will take place.

ERRORS IN THE NOTICE

Notices should be as accurate as possible since employees rely on them for their own planning. However, minor or inadvertent errors in the notice or errors that occur because circumstances change during the 60-day notice period do not violate WARN.

EXTENSION OF NOTICE

Additional notice is required when the date or schedule of dates of a planned plant closing or mass layoff is extended beyond the date or the ending date of any 14-day period announced in the original notice as follows:

• If the employment action is postponed for less than 60 days, additional notice should be given as soon as possible and should include reference to the earlier notice, the new action date, and the reason for the postponement. The notice need not be formal but should be given in a manner that will provide the information to all affected employees; or
• If the postponement is for 60 days or more, a new notice is required. Routine periodic notice, given whether or not a plant closing or mass layoff is impending and with the intent to evade specific notice as required by WARN, is not acceptable.

SERVING NOTICE

An employer may use any reasonable method of delivery designed to ensure receipt of the written notice at least 60 days before separation. However, preprinted notices regularly included in each employee's paycheck or pay envelope and verbal notices do not meet the WARN Act requirements.

SALE OF A BUSINESS

When all or part of a business is sold, even if it is an asset sale, WARN applies. If a covered plant closing or mass layoff occurs, the employer-the seller or buyer-responsible for giving notice depends on when the event occurs. The seller must give notice for a covered plant closing or mass layoff that occurs before the sale becomes effective. The buyer must give notice for a covered plant closing or mass layoff that occurs after the sale becomes effective (see FAQs).

Employees of the seller automatically become employees of the buyer for purposes of WARN. That means that even though there is a technical termination of employment when employees stop working for the seller and start working for the buyer, the technical termination does not trigger WARN.

PENALTIES FOR VIOLATING WARN

An employer who violates WARN is liable to each affected employee for an amount equal to back pay and benefits for the period of violation, up to 60 days. This liability may be reduced by any wages the employer pays over the notice period. WARN liability may also be reduced by any voluntary and unconditional payment not required by a legal obligation.

An employer who fails to provide notice as required to a unit of local government is subject to a civil penalty not to exceed $500 for each day of violation. The penalty may be avoided if the employer satisfies its liability to each affected employee within three weeks after the closing. In any suit, the court, in its discretion, may allow the prevailing party a reasonable attorney's fee as part of the costs.

WARN ENFORCEMENT

WARN is enforced through the U.S. District Courts, as provided in section 5 of the Act. Workers, their representatives, and units of local government may bring individual or class action suits against employers be- lieved to be in violation of the Act. The U.S. Department of Labor has no authority or legal standing in any enforcement action and cannot provide specific binding or authoritative advice or guidance about individual situations. The Department provides assistance in understanding the law and regulations to individuals, firms, and communities.

HOW TO OBTAIN A COPY OF THE WARN ACT AND REGULATIONS

The specific requirements of WARN may be found in the Act itself, Public Law 100-379 (29 U.S.C § 2101, et seq.). The U.S. Department of Labor published final regulations on April 20, 1989, in Volume 54 of the Federal Register, pages 16042 to 16070 (54 FR 16042). The regulations appear at 20 CFR Part 639. The text of this brochure can be seen at the following Web site:

www.doleta.gov/programs/factsht/warn.htm

For more detailed information on WARN, please visit the U.S. Department of Labor's Employment Laws Assistance for Workers and Small Businesses ( elaws) Web site at www.dol.gov/elaws/. This site is currently under development and is expected to be available in 2003.

General questions about the WARN law and regulations may be addressed to:

U.S. DEPARTMENT OF LABOR

Employment and Training Administration

Division of Adults and Dislocated Workers

Room C5325

200 Constitution Avenue, N.W.

Washington, DC 20210

(202) 693-3580

For information regarding how to contact your State Rapid Response Dislocated Worker Unit, call the National Toll-Free Help Line:

1 -877-US-2JOBS

or visit www.doleta.gov/layoff and go to the Employers page.