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When is a WARN notice required? What if layoffs occur over time?

RegSenseWorker Adjustment and Retraining Notification Act (WARN Act)TerminationAgency PublicationCompliance DocsUSALayoffsEnglishFocus AreaTalent Management & RecruitingHuman Resources

The Worker Adjustment and Retraining Notification (WARN) Act requires employers to provide at least 60 days' advance notice of a mass layoff or plant closing. Identifying a plant closing is normally easy, but employers are often confused about what exactly constitutes a mass layoff.

If a layoff action does not trigger the WARN provisions, employers may provide as much (or as little) notice as they choose. For example, if an employer will have a layoff affecting 20 employees, this would not require a WARN notice. The employees could be informed of the layoff on the day it takes effect, and be sent home after arriving to work. Only a “mass layoff” would require advanced notice.

A mass layoff is defined as one that affects at least 50 employees or at least one-third of the workforce, whichever is greater, at a single site of employment. In addition, the layoff must last (or be expected to last) six months or longer. Typically, a “single site of employment” means a single geographic location or a contiguous group of buildings. Even locations on opposite sides of a city may be different locations.

For example, if a location has 400 employees and the employer will lay off 80 employees, a federal WARN notice is not required. Even though the action affects more than 50 employees, it is less than one-third of the workforce at that location. However, if that location had only 200 employees, then the layoff of 80 workers would be 40 percent of the workforce. Since the number is more than 50 and is greater than one-third of the workforce, the employer would have to provide 60 days' advance notice.

As noted, the layoff must also last at least six months. If an employer shuts down operations for two or three weeks over the Christmas holidays, this does not trigger the WARN notice (regardless of how many employees are affected) because the shutdown will be brief.

It's also important to note that WARN defines a “layoff” to include a reduction in hours by more than 50 percent for the affected workers. So, if half of the full-time employees at a location will be reduced to working only 20 hours per week for at least six months, this would trigger the WARN notice.

Changing notice

The regulations recognize that circumstances may change, and the employer may have to delay the layoff action. If the delay will be less than 60 days beyond the date previously given to employees, the employer may simply provide a supplementary notice. However, if the layoff will be delayed more than 60 days, the employer must issue a new notice.

Spreading out the action

Some employers have attempted to spread out the layoffs over a period of months to avoid giving the WARN notice. However, the requirements aren't easy to evade. The regulations refer to employment actions that would affect employees in a 30-day period. However, the regulations also require an employer to “look back” and “look forward” at any 90-day period to determine if the layoffs would trigger the WARN notice.

For example, if a location has 200 employees, and the company plans to lay off 40 employees on July 1, and another 40 employees on September 2, this would trigger the WARN notice obligation, even though the layoffs are more than 30 days apart. Since the layoffs were planned in advance (not due to unforeseeable circumstances), the employer cannot avoid the notice requirement by simply imposing the layoffs over more than 30 days.

The penalty for failing to provide the required notice is typically an obligation to continue paying employees throughout the notice period. If employees should have been given 60 days' notice, but were only given 15 days' notice, the employer may have to continue paying those employees for the other 45 days — even if they are no longer working.

The penalty will not generally apply if the layoff occurred because of a natural disaster or because of unforeseeable business circumstances such as the unexpected loss of a major contract.

State vs. federal requirements

Employers should also check state notice requirements before assuming that the federal WARN provisions provide the only obligation. While the federal law applies only to employers with 100 or more employees, and to actions as described above, state laws may require additional notice, or may apply to smaller layoff actions. Sixteen states impose requirements beyond the federal provisions.

For example, California law applies to employers with 75 or more employees and requires notice when a layoff affects 50 or more employees, regardless of the percentage of the workforce. New York law applies to employers with 50 or more employees and requires 90 days' notice if a layoff will affect 25 or more employees, regardless of the percentage of the workforce. Other states may have more restrictive provisions as well.

['Termination']
['Layoffs', 'Worker Adjustment and Retraining Notification Act (WARN Act)']
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