WARN

Scope

In general, employers are covered by WARN if they have 100 or more employees, not counting employees who have worked less than 6 months in the last 12 months and not counting employees who work an average of less than 20 hours a week. Employees entitled to notice under WARN include hourly and salaried workers, as well as managerial and supervisory employees. Business partners are not entitled to notice.

Regulatory citations

• 29 U.S.C. 2101

Key definitions

• Bumping: The displacement of an employee’s position by another worker.
• Employment loss: An employment termination, other than a discharge for cause, voluntary departure, or retirement, that results in a layoff exceeding six months or a reduction in an employee’s hours of work of more than 50% in each month of any six-month period.
• Mass Layoff: An employment loss at the employment site during any 30-day period for 500 or more employees, or for 50-499 employees if they make up at least 33% of the employer’s active workforce.
• Plant Closing: The closing of an entire employment site (or one or more facilities or operating units within an employment site) that will result in an employment loss (as defined later) for 50 or more employees during any 30-day period.

Summary of requirements

The WARN notice date is based on the date that employment ends. Courts have interpreted the WARN notice as a requirement for employees to receive at least 60 days notice before employment ends. Employers who failed to provide 60 days notice have been required to pay employees their wages and benefits for the time. In essence, courts have found that WARN gives employees the right to 60 days of pay, even if the required notice was not provided.

Employer coverage. All private employers are covered, as are public and quasi-public entities which operate in a commercial context and are separately organized from the regular government. Regular Federal, State, and local government entities which provide public services are not covered.

What triggers notice:

• Plant closing: A covered employer must give notice if an employment site (or one or more facilities or operating units within an employment site) will be shut down, and the shutdown will result in an employment loss (as defined later) for 50 or more employees during any 30-day period.
• Mass layoff: A covered employer must give notice if there is to be a mass layoff which does not result from a plant closing, but which will result in an employment loss at the employment site during any 30-day period for 500 or more employees, or for 50-499 employees if they make up at least 33% of the employer’s active workforce.

Neither instance includes employees who have worked less than 6 months in the last 12 months or employees who work an average of less than 20 hours a week for that employer.

Notice must also be provided if the cumulative number of employment losses which occur during a 90-day period reaches the threshold level of either a plant closing or mass layoff, unless the employer demonstrates that the employment losses during the 90-day period are the result of separate and distinct actions and causes, and are not an attempt to evade WARN.

Sale of businesses. In a situation involving the sale of part or all of a business, the following requirements apply.

• There is always an employer responsible for giving notice.
• If the sale by a covered employer results in a covered plant closing or mass layoff, the required parties must receive at least 60 days notice.
• The seller is responsible for providing notice of any covered plant closing or mass layoff which occurs up to and including the date/time of the sale.
• The buyer is responsible for providing notice of any covered plant closing or mass layoff which occurs after the date/time of the sale.
• No notice is required if the sale does not result in a covered plant closing or mass layoff.
• Employees of the seller (other than employees who have worked less than 6 months in the last 12 months or employees who work an average of less than 20 hours a week) on the date/time of the sale become, for purposes of WARN, employees of the buyer immediately following the sale. This provision preserves the notice rights of the employees of a business that has been sold.

Exceptions to employment loss. Employment loss does not occur when an employee refuses a transfer to a different employment site within reasonable commuting distance.

Also no employment loss occurs when an employee accepts a transfer within 30 days after it is offered or within 30 days after the plant closing or mass layoff, whichever is later. In both cases, the transfer offer must be made before the closing or layoff, there must be no more than a 6 month break in employment, and the new job must not be deemed a constructive discharge. These transfer exceptions from the “employment loss” definition apply only if the closing or layoff results from the relocation or consolidation of part or all of the employer’s business.

Exemptions. An employer does not need to give notice if a plant closing is the closing of a temporary facility or the completion of a temporary project provided that employees clearly understood the temporary nature of the work when hired.

Notice is not required for strikers or to workers who are part of the bargaining unit(s) which are involved in the labor negotiations that led to a lockout when the strike or lockout is equivalent to a plant closing or mass layoff. However, those non-striking employees who experience an employment loss as a direct or indirect result of a strike and workers who are not part of the bargaining unit(s) which are involved in the labor negotiations that led to a lockout are still entitled to notice.

Who must receive notice. The employer must give written notice to the representative or bargaining agency of affected employees and to unrepresented individual workers who may reasonably be expected to experience an employment loss. This includes employees who may lose their employment due to “bumping,” or displacement by other workers, to the extent that the employer can identify those employees when notice is given. If an employer cannot identify employees who may lose their jobs through bumping procedures, the employer must provide notice to the incumbents in the jobs which are being eliminated. Employees who have worked less than 6 months in the last 12 months and employees who work an average of less than 20 hours a week are due notice, even though they are not counted when determining the trigger levels.

The employer must also provide notice to the State dislocated worker unit and to the chief elected official of the unit of local government in which the employment site is located.

Notification period. With three exceptions, notice must reach affected employees or their representatives at least 60 days before a closing or layoff, regardless if it will be a single event or a series of events. Notice is also due to the State dislocated worker unit and local government at least 60 days before each separation. If the workers are not represented, each worker’s notice is due at least 60 days before that worker’s separation.

The exceptions to 60-day notice are:

1. Faltering company – applies only to plant closings. This covers companies seeking new capital or business in order to stay open, and where the company reasonably believes that advance notice would ruin the opportunity.
2. Unforeseeable business circumstances – applies to closings and layoffs that are caused by business circumstances that were not reasonably foreseeable at the time notice would otherwise have been required.
3. Natural disaster – applies where a closing or layoff is the direct result of a natural disaster, such as a flood, earthquake, drought or storm.

In these situations, the burden of proof is on the employer that conditions have been met. The employer must give as much notice as possible, and notices must include a brief statement of the reason for reducing the notice period.

Form and content of notice. While no particular form of notice is required, all notices must be in writing. The method of delivery must ensure receipt 60 days before a closing or layoff. Notice must be specific.

The minimum content of each notice varies depending on the recipient (employee, union representative, or elected official). Additional notice is required when the date or schedule of dates of a planned plant closing or mass layoff is extended beyond the 14-day period identified in the original notice.

Recordkeeping. No particular form of recordkeeping is required.

Penalties. An employer who violates the WARN provisions are liable to each aggrieved employee for an amount including back pay and benefits for the period of violation, up to 60 days. The employer’s liability may be reduced by such items as wages paid by the employer to the employee during the period of the violation and voluntary and unconditional payments made by the employer to the employee.

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. This penalty may be avoided if the employer satisfies the liability to each aggrieved employee within 3 weeks after the closing or layoff is ordered by the employer.

Enforcement. Enforcement of WARN requirements is through the United States district courts. Workers, representatives of employees and units of local government may bring individual or class action suits. Each state may have their own statutes that provide even greater notice requirements and impose greater penalties and enforcement mechanisms.