WARN Act Notifies Workers of Pending Layoffs
Massive Job Cuts Highlight Need for Warning
May 18, 2009
The 1988 Worker Adjustment and Reassignment Notification Act (WARN Act) requires employers to give employees 60 days notice of impending mass layoffs or plant closures.
Employers initiated 3,489 mass layoff events in the first quarter of 2009 that resulted in the separation of 558,909 workers from their jobs, the highest first-quarter levels on record, according to the Bureau of Labor Statistics. Thirty-two states recorded first quarter program highs in the numbers of separations.
According to the U.S. Department of Labor, any company that has 100 or more employees, not counting employees who have worked less than six months in the last 12 months or who work less than 20 hours a week, is required to give workers 60 days notice of impending plant closings.
Employers also must give notice if they plan a mass layoff of 500 or more employees that does not involve closing plants or facilities. For layoffs affecting 50 to 499 employees, notification is required if the layoffs will affect at least 33 percent of the employer's active workforce during any 30-day period.
Employment loss is defined as:
- employment termination, other than a discharge for cause, voluntary departure, or retirement;
- a layoff exceeding six months; or
- a reduction in an employee's hours of work of more than 50 percent in each month of any six-month period.
Workers Entitled to Compensation
If an employer violates the WARN Act, employees may be entitled to compensation, including back pay or benefits, for the period of violation. Workers may bring individual or class action lawsuits against employers who have failed to comply with the WARN Act.
WARN Act notice also kicks in dislocated worker programs, which help laid-off workers find or train for new jobs.
State WARN Acts
Many individual states have enacted their own WARN Acts, which in some cases are more stringent than federal law. For example, the New York State WARN Act requires employers to provide 90 days’ notice prior to a plant closing, mass layoff or relocation occurring on or after Feb. 1, 2009, according to the New York State Department of Labor. The state WARN Act also applies to private employers with 50 or more workers who layoff at least 25 employees.
Employers Evading WARN Act
Despite the strictures of the WARN Act, which has been law since 1988, some employment attorneys and labor advocates say companies are too easily able to evade the act’s notice requirements.
Among the exceptions to the WARN Act notice requirements are:
- faltering company, where a company has sought new capital or business in order to stay open and where giving notice would ruin the opportunity to get the new capital or business;
- unforeseeable business circumstances; and
- natural disaster, such as a flood, earthquake, drought or storm.
“Many critics of the WARN Act think it doesn't go far enough because it covers only the largest layoffs by the largest employers,” Dennis Westlind, an attorney in the Portland, Ore., Stoel Rives labor and employment group, said in an article on the law firm’s Web site. “We'll be watching to see if these calls for revising the WARN Act gain traction in Congress this term.”
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