Uncertain economic times can cause businesses across all industries to cut costs, including making difficult decisions about employment and labor. Salary cuts, suspending raises, trimming hours, and having employees go on furlough are all common ways companies respond to forced closures or general business slowdowns.
Some employers may be considering layoffs, but they should keep some of the statutory provisions that can be triggered by this action in mind. Today, we’re discussing the Worker Adjustment and Retraining Notification Act (WARN Act).
Who must comply with the WARN Act?
This federal law requires specific businesses to provide advance notice of any layoffs or furloughs before they occur. Most states have state-specific WARN acts that are applicable only in their state. Employers in states with WARN acts must comply with both state and federal regulations.
The threshold for complying with the federal WARN Act is generally for businesses with more than 100 employees. If your business is required to comply with the WARN Act, then your compliance is triggered if there is a mass layoff or plant closure planned.
A plant closing is defined as an employment loss of more than 50 employees during a 30-day period due to either a temporary or permanent shutdown of a single site.
WARN Act requirements are more commonly associated with mass layoffs instead of a plant closure.
In this case, a mass layoff is defined as an employment loss of at least 50 people, and the number of laid-off employees comprises at least one-third of the active workforce. It also happens at a single site and within a 30-day time period.
Employer Obligations Under the WARN Act
When the WARN Act is triggered, companies must provide a 60-day written notice to all affected employees of a mass layoff or plant closure. If the business does not provide at least 60 days of notice, they are responsible for paying the employees’ wages for the notice period.
The COVID-19 crisis, and its forced shutdowns of many businesses, presented unique challenges for the WARN Act. In these scenarios, many employers pled “unforeseen business circumstances,” which is a general exception to the WARN Act requirements.
Unforeseen business circumstances are a sudden and major economic downturn and present a situation outside the company’s control.
However, even if your company cannot give the full 60-day notice, you should still give employees as much notice as possible, even if the notice occurs after the fact.
Employees Who Must Receive a WARN Act Notice
Notices of a mass layoff or plant closure must be provided to:
- Every affected employee, or their union representative
- The state agency in which the employment site is located
- The government official of the municipality where the site is located
Each state has its own agency for which notice should be provided of a mass layoff or plant shutdown, as well as a process for notification.
Mandatory WARN Act Notification Verbiage
The exact working of the WARN Act notification depends on who the intended recipient is. However, each notice should be specific and contain:
- Indication whether the action will be temporary or permanent
- Whether the entire plant or job site will be closed
- The first expected date of job loss
- Project job loss schedule
- Name and physical address of the job site
- Company official’s name, phone number, and contact information
- Statement of circumstances if the employer couldn’t provide the full 60-day notice
A business law firm can help you correctly word this document.
Contact Woods Lonergan for WARN Act Assistance
Woods Lonergan is a New York City business law firm with extensive experience and a deep understanding of the WARN Act and employer compliance. If you are a business owner who qualifies for WARN Act responses, we can help.
Our legal team can assist with drafting statements that comply with the WARN Act requirements and help you meet the conditions the Act mandates. Contact us today to learn more.