Company layoffs are devastating to workers and their families. But having advance notice can allow people to plan and adjust, so the layoff is not as difficult. In 1988, the Worker Adjustment and Retraining Notification Act (the “WARN Act”) became law. How does the WARN Act help employees facing layoff? If you are a business owner or employer, does the WARN Act apply to your business?
WARN Act Basics
Lawmakers intended this law to help protect workers from surprise layoffs. Specifically, employers must provide at least 60 days’ notice of plant closings and mass layoffs covered by the Act.
For plant closings, employers covered by the WARN Act must notify covered employees if 50 or more will lose their jobs during any 30-day period.
Mass layoffs are handled differently. Generally, covered employers are required to provide notice:
If there is a mass layoff that does not cause the plant to close,
But
Affects 500 or more employees during any 30-day period
Or
Affects 50-499 employees “if they make up at least 33% of the employer’s active workforce.”
In some situations, business owners that sell all or part of the business must notify employees. This provision seems to apply only when the sale triggers a mass layoff or plant closing.
However, the WARN Act does not apply to all employers.
Employers Who Are Covered
Generally, employers must have 100 or more employees for the WARN Act to apply.
The 100 employees requirement does not cover all employees, though. Employees “who have worked less than 6 months in the past 12 months” and employees who work an average of fewer than 20 hours a week are not counted.
The WARN Act does apply to the following types of employers:
- Private for profits,
- Private nonprofits,
- Certain public and quasi-public entities
For covered employers, the WARN Act provides a complicated set of requirements.
Employer Obligations under the WARN Act
For covered employers, covered employees, and covered events, employers must:
- Give written notice to representatives or bargaining agencies,
- Employees who will lose their jobs,
- Employees who will be bumped or displaced by other workers.
- Notify the state dislocated worker unit, and
- Provide written notice to the chief elected official of local government where the affected facility is located.
In most cases, employers must give notice 60 days before the plant closing or mass layoff. Also, notices must always be specific and always be in writing.
What Happens if You Don’t Comply?
Employers that don’t comply could be liable for providing each employee with back pay and benefits for up to 60 days.
Failing to notify the appropriate local government unit could receive a civil penalty of up to $500 for each day of violation.
Interestingly, enforcement of the WARN Act is accomplished through United States district courts. Workers and others can file individual or class action suits against employers for violations, leaving liability and penalty decisions up to district court judges.
About the Author
Attorney Richard Sierra at the Florida Small Business Center assists clients like you with business and litigation matters. As always, Our Goal Is to Help You Succeed™. For an appointment, you may call us at 1-866-842-5202 or use the contact form on our website. We represent clients throughout the State of Florida, including Coral Springs, Coconut Creek, Boca Raton, Delray Beach, Pompano Beach, Sunrise, Fort Lauderdale, Miami, West Palm Beach, Jupiter, Deerfield Beach, Stuart, Port St. Lucie, Orlando, Naples, Fort Myers, Sarasota, Tampa, and surrounding communities.