What to Know About the WARN Act

The Worker Adjustment and Retraining Notification Act of 1988 provides protection to workers and their families, as well as communities, by requiring employers to provide 60 days of notice in advance of major industrial plant closings and mass layoff events. The notice must be provided to the affected workers directly or through their representative body (such as a labor union).

Employers are covered under the WARN Act if:

  • They employ 100 or more employees, not counting employees who have worked for less than six months of the previous 12 months or employees who work, on average, less than 20 hours a week.
  • They are private, for-profit employers or private, nonprofit employers
  • They are public or quasi-public entities operating in a commercial context, separately organized from government entities

Employers are NOT covered under the WARN Act if:

  • They are regular federal, state or local government entities which provide public services to their communities

Employees are covered under the WARN Act if:

  • They are hourly and salaried workers, including managerial and supervisory employees, however business partners are NOT entitled to the 60-day notice

The WARN Act defines a “plant closing” as the shuttering of any work facility that will result in an employment loss of 50 or more employees during any 30-day period. A mass layoff is an event where an employment site will face employment losses of 500 or more employees during any 30-day period (or anywhere between 50 and 499 employees if the number of layoffs equals at least 33 percent of the employer’s active workforce.

Additionally, employers must follow the WARN Act if they will hit either of those two aforementioned thresholds of employment loss involving two separate groups of employees over a 90-day period.

If a business is sold, the seller is responsible for giving employees notice in the days leading up to a sale, and the buyer is then responsible for providing notice of whether or not there will be a plant closure or other mass layoff event in the days following the sale of the business. Employees of a purchased company are automatically considered employees of the buyer, preserving their rights to the 60-day notice.

Exemptions
  • An employee cannot be considered to have been “laid off” if they refused to accept a job transfer to a different site of employment within a reasonable commuting distance of their home.
  • An employer does not need to give a 60-day notice for the closing of a temporary facility or if the expected closing or mass layoff is due to a previously-agreed-upon project or undertaking. However, an employer may not falsely claim a facility is a temporary facility to avoid the WARN Act requirements.
  • Striking employees are not considered to be mass layoff events, and an employer does not need to provide any notice to striking workers that lead to a plant closing or mass layoff. Any workers who do not participate in striking must still receive the advanced notice if the strike is going to result in a plant closure or mass layoff.
  • A “faltering company” – one that is seeking new capital or attempting to gain new business in order to stay open – does not need to provide a 60-day notice of any impending closures or layoffs, as that disclosure may ruin their last chances of saving their business.
  • A company that suffered “unforeseeable business circumstances,” such as a CEO sinking the company in one evening due to a rampant gambling addiction, is not required to provide notice, as they couldn’t have possible known the event would happen 60 days prior to it happening.
  • A company that suffers a natural disaster, such as a freak tornado, does not need to provide notice.
The WARN Act exists to prevent surprise hardships for employees

The WARN Act is a great example of providing a contingency to workers so that they are not blindsided by their place of employment shutting down, giving them time to find a new job or relocate to an area with better opportunities.

If you worked for an employer that was bound by the WARN Act and you were not properly warned about a mass layoff event or a plant closure, your employer was in violation of federal law and you may have a case for a claim against them if you were caused undue suffering or hardship as a result.

At Altman & Altman LLP, we have over 40 years of experience handling a wide range of cases, and can provide the necessary guidance and skill to make your claim a successful one. Call us for a free consultation today at 617-492-3000 or toll-free at 800-481-6199. We are available 24/7.

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