The Ultimate Guide to the WARN Act

Introduction

In this blog post, we offer an overview of the Worker Adjustment and Retraining Notification (WARN) Act, its notices and employee resources. This is a starting point for understanding the topic, not guidance on how the law applies to your individual circumstances.

For federal definitions and notice rules, consult 20 CFR Part 639, the federal WARN regulation. Use the Department of Labor resources linked below for introductory materials.

What is the WARN Act?

The Worker Adjustment and Retraining Notification (WARN) Act helps ensure advance notice for qualified plant closings and mass layoffs. For help understanding worker rights and employer responsibilities, visit the U.S. Department of Labor's WARN resources. The page includes a Worker's Guide, which DOL describes as a brief overview, not an official interpretation of the Act or its regulations.

History of the WARN Act

Congress enacted the Worker Adjustment and Retraining Notification (WARN) Act in 1988 to require advance notice to employees and state and local officials for covered mass layoffs and plant closings.

A 2003 GAO report found that approximately 661,000 workers were involved in mass layoffs or plant closures meeting WARN criteria in 2001. Based on 2001 BLS data, GAO estimated that employers provided notice for 36% of the events that appeared subject to WARN's advance-notice requirements; this was an estimate about events, not workers.

In its 2003 report, the U.S. Government Accountability Office (GAO) recommended that Congress consider simplifying layoff thresholds, clarifying employer definitions and damages, and establishing a uniform statute of limitations. These were recommendations for legislative consideration, not a statement that those changes had become law.

The WARN Act was mentioned in history in 2013 following the sequestration under the Obama administration. The administration felt it unnecessary and inappropriate for Federal contractors to provide WARN Act notices 60 days in advance of the potential sequestration due to the uncertainty regarding the bill.

Definitions of key terms surrounding the WARN Act

Before we get into the essentials of the WARN Act, it is important to understand some of the language used when discussing the WARN Act. Below are some common terms associated with the WARN Act.

Mass Layoff

A reduction in force, not resulting from a plant closing, that causes employment loss at a single site during any 30-day period for at least 50 employees and at least 33% of active employees, excluding part-time employees. If at least 500 employees are affected, excluding part-time employees, the 33% requirement does not apply; other criteria still must be met.

Plant Closing

The permanent or temporary shutdown of a single site of employment, or one or more facilities or operating units within it, resulting in employment loss at that site during any 30-day period for at least 50 employees, excluding part-time employees.

Employment loss: Under federal WARN, this means termination other than discharge for cause, voluntary departure or retirement; a layoff exceeding six months; or a reduction in an employee's hours of more than 50% in each month of a six-month period.

90-day aggregation: Employers must also look 90 days ahead and behind: smaller employment losses at the same site may collectively reach a WARN threshold within any 90-day period. This aggregation rule does not require notice if the employer demonstrates separate and distinct actions and causes, with no attempt to evade WARN.

Covered Establishments

Federal WARN coverage depends on the employer tests below. For counting purposes, “part-time” means averaging fewer than 20 hours per week or having worked fewer than six of the 12 months before notice is required, even if working full-time hours. The weekly average uses the shorter of actual employment or the most recent 90 days.

Employer

A business enterprise with 100 or more employees, excluding part-time employees; or 100 or more employees including part-time workers who together work at least 4,000 hours weekly, excluding overtime. Regular federal, state, local and federally recognized Indian tribal governments are not covered. Public or quasi-public entities engaged in business may qualify if separately organized from regular government, with their own governing bodies and independent control of personnel and assets.

Notice

A warning in writing including information such as the name and address of the employment site, reasons behind the mass layoff or plant closure, the number affected of employees and their positions and contact information of a company official for additional information.

Bumping rights

A system put in place to provide for an employee to displace another employee as defined in a collective bargaining agreement. They are often based on seniority.

What are the requirements of the WARN Act?

Covered employers generally must provide affected employees with 60 days' notice before a covered plant closing or mass layoff, subject to the reduced-notice exceptions below.
Employers must notify the State Rapid Response Dislocated Worker Unit and the chief elected official of the local government.
An employer must give notice to the chief elected officer of the representative or bargaining agency of a given employee. In the event the employee does not have a representative the notice must be issued directly to them.
The notice must contain information regarding, the name and address of the employment site, specificity on the temporary or permanent nature of the layoff or closure, reasons behind the layoff or closure, the number and positions of affected employees, declaration of bumping rights and contact information of a company office for additional information.

Who is protected under the WARN Act?

Employees of covered private non-profit or for-profit employers, and qualifying separately organized public or quasi-public business entities, may be entitled to notice for covered events. Part-time workers are due notice even though they are excluded from plant-closing and mass-layoff threshold counts. It is important to note employees subject to employment loss due to bumping rights must also be notified and, therefore, are also protected under the WARN Act.

Part-time counting rules and notice exclusions

WARN requires notice for covered events; it does not generally prohibit layoffs. The first two entries below explain part-time counting rules, not exclusions from notice. The remaining entries describe other exclusions.

Employees who have worked fewer than six of the 12 months before notice is required count as part-time, even if working full-time hours. They are due notice in covered events.
Employees averaging fewer than 20 hours per week count as part-time. They are due notice in covered events, although excluded from plant-closing and mass-layoff threshold counts.
Federal, state and local government employees.
Employees contracted under temporary projects and are made aware of the terms.
Strikers or employees locked out in a labour dispute.
Business partners, consultants and contract employees assigned to a given business but are employed by separate entities or are self-employed.

Is my state covered under the WARN Act?

Federal WARN requirements apply nationwide to covered employers and events; other laws may provide additional notice or rights and remedies. States such as New York, Illinois and California have separate provisions that apply to their state specifically. These state provisions go further in depth with states such as New York requiring a 90-day notice instead of a 60-day notice. These state-individual requirements further encourage transparency.

States with specific provisions include:

When can the federal WARN notice period be reduced?

For covered plant closings and mass layoffs, federal WARN generally requires 60 days' notice. Three exceptions may reduce that period. The employer must prove the exception applies, give as much notice as practicable to the required recipients—even after the event in some circumstances—and, when giving notice, briefly explain why the period was reduced.

Natural disaster

A plant closing or mass layoff must be a direct result of a natural disaster to qualify. Even if advance notice is impossible, the employer must still give as much notice and required information as practicable, before or after the employment loss.

Faltering company

The faltering-company exception is narrowly construed and applies only to plant closings, not mass layoffs. An employer must establish that the exception's conditions are met before relying on a reduced notice period.

Unforeseeable business circumstances

This exception can reduce the notice period for plant closings or mass layoffs caused by business circumstances that were not reasonably foreseeable when 60-day notice would have been required. The notice obligations described above still apply.

How does it assist employees?

You may be asking yourself how the WARN Act is helpful or you may be wondering how the government assists workers affected by mass layoffs and plant closings.

In submitting a notice to the State Rapid Response Dislocated Worker Unit, the unit can coordinate with the employer to provide information on retraining services available at their disposal or about new employment opportunities they can take advantage of.
Allows employees ample time to transition and seek alternative opportunities.
It provides advance-notice rights for covered plant closings and mass layoffs, rather than generally prohibiting them.
Offers a means of empowerment for the employees as it provides avenues for equitable and fair labour laws.
Promotes transparency between employer and employee which is important in fostering an equitable relationship between the parties.

Retraining services may include:

Labour market information
Job search and placement assistance
Entrepreneurial training
Career counselling
Resume writing workshops

What if my rights under the WARN Act have been violated?

If you feel as though your rights under the WARN Act have not been effectively upheld, it is important to reach out to a legal entity and seek further advice. In reporting the violation of your rights you may stand to gain benefits such as:

Issuance of an amount equal to back pay and benefits for the period of violation for up to 60 days.
Issuance of a reasonable attorney fee as part of the costs.

Therefore, if you suspect your rights have been violated, begin the process of filing a claim and ensure you collect adequate evidence that clearly outlines the shortcomings of your employer in regard to following the WARN Act. Remember to utilize resources such as lawyers.

Where do I find data on recent layoffs and plant closures?

Check your state labor department’s website for posted WARN notices. Third-party collections such as the WARN database may provide another starting point, but should not be assumed to contain every layoff or closure.

How can I effectively support my team following a WARN Act notice?

Undoubtedly layoffs and closings are difficult topics to navigate. They have both physical and mental effects on employees. It is important to show support to your workmates if they are going through this experience. Different ways you can show support include:

Stay in touch with them. It is easy to lose the connection you may have bonded over with your workmates once they are laid off. It is also possible your workmate shares the anxiety of being forgotten and losing some of the friends they have made during their time at the company. In order to help them feel supported and appreciated during this time, it is important to stay in touch with them.
Offer a listening ear. A lot of the time we tend to assume how other people are feeling. Take a step back and listen to your workmate, often they just need someone to talk to.
Share your connections and network. It is inevitable your workmate is going to be looking for an alternative work arrangement. Offering your network and some of your connections is a great way to show your support for the journey ahead.
Let them know they are valued and appreciated. Dealing with a layoff may have an effect on one's self-esteem. It is important to remind your workmate of the things they have accomplished during their time at your workplace. Ensure they feel confident in themselves and see value in their skills.
Attend networking events with them. It may be scary to navigate the networking scene fresh especially coming from a stable job. Show your workmate support by offering to go with them to some of the networking events tailored to job seekers. In doing so they can ease up their nerves and feel comfortable knowing you are there for their support.

There are endless ways you can help your workmate navigate this difficult time. Make sure you tap into some of the resources you have to help them make this journey easier.

Conclusion

We have discussed a wide array of information regarding the WARN Act. The key takeaway from this blog is you have rights. You have rights tailored to help you navigate the work experience in a just and equitable way. The WARN Act was enacted to encourage transparency between employer and employee, arm employees with legal support and allow for a smoother transition in between jobs. It is your responsibility to not only educate yourself on these resources but also utilize them if need be. Stay informed. Stay educated.