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The Worker Adjustment and Retraining Notification (WARN) Act

The Worker Adjustment Retraining and Notification Act (WARN Act) was enacted to help ensure that employees and the state are given advance notice of large layoffs. The WARN Act requires any employer who employs 100 or more employees and who plans a closing or mass layoff, to give written advance notice of that plant closing or layoff.

A plant closing is defined as the closure of a single site or partial site of employment that results in the layoff or firing of fifty or more full-time employees within thirty days. A mass layoff is defined as the layoff or firing, within thirty days, of at least 500 full-time employees at one site, or, at smaller work sites, the layoff of fifty or more full-time employees, if the layoff is of at least thirty-three percent of the workforce at that site. When determining how many employees have been affected by a plant closing or mass layoff, an employee will also be considered "laid off" if his or her hours are cut by more than one half.

As indicated by its name, the WARN Act does not prevent an employer from closing a site or conducting a layoff, nor may it delay such a closing or layoff. It merely requires that an employer give written notice of such a closing or layoff to the unions representing the employees. If no such union exists, WARN requires notice to any employee who will be affected by the layoff or closing, to the appropriate state dislocated-worker unit, and to the chief local elected official, such as the mayor. An employer who fails to provide notice may be required to continue to pay laid-off employees and provide them with employment benefits for up to sixty days following the layoff or closing. An employer may avoid being assessed this penalty if it can show that:

• it was trying to save the company, and giving such notice would have crippled its ability to do so;
• the closing or layoff was due to business circumstances that it could not have foreseen at the time the notice would have been given;
• the closing or layoff was caused by a natural disaster; or
• the closing was of a temporary facility or layoff was of workers who were hired only to work on a temporary project.

Some state or local governments have enacted their own layoff or plant closing laws, which may apply to smaller employers or layoffs.

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