Ensuring Compliance with the WARN Act on a Federal Level

In August of 1988, the Worker Adjustment and Retraining Notification (WARN) Act was passed by Congress. It became law on February 4, 1989, so at this point, the WARN Act has been around for over 3 decades. However, during the Covid-19 Pandemic when employers all over the country were laying off workers in masse, the law had to be understood in a new situation, and thus, came back into the spotlight.

Now, as an economic recession looms and industries are beginning to announce layoffs, it’s important that employers ensure a deep understanding of the WARN Act to accurately comply with its requirements. The WARN Act was designed to protect workers from large layoffs; in short, it requires that employees give ample notice of mass layoffs, but there’s a lot more detail to it than that. Please keep in mind that some states, such as California, have their own modified state WARN Acts or similar laws, so be sure to read up on state and federal requirements pertaining to layoffs and worker protections before making any major decisions.

WARN Act Stipulations

Employers with 100 employees are more are legally required to understand and follow the WARN Act. When considering the 100 employees, the WARN Act includes all employees that have worked at an establishment more than 6 out of the last 12 months and work an average of 20 hours or more per week. If this applies to your business, you must provide notice of plant closings and mass layoffs at least 60 calendar days prior to the event.

A mass layoff or plant closing only falls under the WARN Act if it will impact 50 or more full-time employees at a single site of employment, as long as those 50 employees constitute at least 33% of the site’s workforce. This advance notice allows workers the chance to find new employment and successfully transition out of their roles without endangering the well-being of themselves or their families. New jobs might require learning new skills, and this window of time gives the employees a chance to obtain the necessary skills and remain competitive in the current job market.

Managers, supervisors, hourly workers, and salaried workers are all protected under the WARN Act. Employers who are anticipating large layoffs or closing a site of employment must also give advance notice to official representatives of the employees on a local and state level. Lastly, during the notice period, employees must receive their pay in full.

Extenuating Circumstances & The WARN Act

There is a clause within the law that outlines exceptions to the rule. If a business faces “unforeseeable business circumstances,” defined as circumstances caused by a sudden, dramatic, and unexpected action or condition outside the employer’s control, then it is not held to abide by the law. This is the part of the law under question and reignited interest in the law during the pandemic. Even if a business does face unforeseen circumstances, it must provide as much advance notice as possible.

Consequences of Violation

If any employer violates the warn act, it can be held responsible for paying back each day of violation including benefits, for up to 60 days. This payback would be required for every impacted employee who did not receive ample notice of their job loss. Additionally, employers can face civil penalties of up to $500 per day if they do not provide notice to local government officials.

As an employer, violating the WARN Act can come with major consequences. It is best to do your due diligence as a business leader and provide notice in the event of mass layoffs or site shutdowns.