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Navigating the Federal WARN Act: A Comprehensive Guide for HR Managers

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6 min read
warn act
Categories Legal & Finance

The Worker Adjustment and Retraining Notification Act (WARN Act) is a crucial piece of legislation designed to protect employees and provide them with advance notice in the event of significant workforce changes. For HR managers, understanding the ins and outs of the WARN Act is essential to ensure compliance and foster a transparent and fair working environment. In this article, we will explore the key aspects of the WARN Act and its implications for HR professionals.

TABLE OF CONTENTS

 

What are the WARN Act Requirements?

The WARN Act, enacted in 1988, mandates that covered employers must provide their employees with a 60-day notice before a plant closing or mass layoff. This notice period allows affected employees and their families sufficient time to plan for potential unemployment and seek alternative employment opportunities. The act also requires employers to notify local government officials and the workforce development system of impending layoffs.

When must the WARN notice be given?

The WARN Act requires employers to provide notice to affected employees, their representatives, the local chief elected official (e.g., mayor), and the state dislocated worker unit at least 60 calendar days in advance of planned plant closings or mass layoffs. This 60-day notice period is intended to give employees and their families sufficient time to prepare for the prospective loss of employment, seek alternative job opportunities, and, if necessary, participate in skill training or retraining programs.

It’s important to note that this notice period is a minimum requirement, and employers are encouraged to provide notice as early as possible.

In certain circumstances, employers may be exempt from the full 60-day notice requirement, but they must meet specific conditions outlined in the Act. These exemptions include situations where the layoffs result from unforeseeable business circumstances or where the employer is actively seeking capital or business that would allow the company to avoid or delay the layoffs.

warn notice trigger

What is a WARN notice?

Notification to individual employees must be presented in clear and precise language, providing information about the closure or layoff, specifying whether it is permanent or temporary, indicating the date and location, and identifying the contact person within the company for further details. The notices provided to union representatives and government entities follow a similar format.

What happens if you violate WARN Act?

If an employer fails to notify the local government as they should, they could be fined up to $500 for each day they don’t provide the required notice. But, if the employer pays what they owe to each affected employee within three weeks after the closing, they can avoid this penalty.

What is a mass layoff?

Under the WARN Act, a mass layoff is defined as a situation where one of these criteria are filled:

  1. 500 employees: Job loss occurs for at least 500 employees during a 30-day period at a single employment site
  2. 50 employees: 50 employees laid off if the laid-off employees make up at least 1/3 of the workforce
  3. 33% of the workforce: Job loss affects at least 33% of the workforce (excluding part-time employees) at a single employment site during a 30-day period.

It’s important to note that these criteria are used to determine whether a mass layoff triggers the WARN Act’s notification requirements. If either of these conditions is met, the employer is generally obligated to provide affected employees with a 60-day advance notice of the impending layoffs. Certain exceptions specified in the legislation apply.

Does WARN Act apply to remote employees?

Although the WARN Act is quite vague on the subject, the Act can apply to remote employees if the remote location is considered part of a covered employment site facing a plant closing or mass layoff. Employers must assess the overall impact on the workforce, including both on-site and remote employees, to determine if obligations specified in the law are triggered. Compliance involves providing affected remote employees with the required notice and informing relevant parties as specified by the Act.

Who Does the WARN Act Protect?

The WARN Act primarily protects employees facing job loss due to plant closings or mass layoffs. A plant closing is defined as the shutdown of a single employment site, resulting in job loss for 50 or more employees during a 30-day period. Mass layoffs involve job loss for at least 500 employees or 33% of the workforce at a single site during a 30-day period.

WARN Notice by State

While the federal WARN Act sets a baseline for protection, some states have additional requirements or more stringent regulations. Employers should be aware of both federal and state WARN act provisions to ensure compliance. States such as California, New York, and Illinois have their own specific requirements that HR managers need to consider.

What States Have the WARN Act?

The federal WARN Act sets standards for all US states, but not all US states have their own state-specific WARN requirements.

The following states have their own requirements, also known as mini-WARN acts: California, Connecticut, Hawaii, Illinois, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New York, Oregon, Rhode Island, South Carolina, Tennessee and Wisconsin.

States have their own WARN notice requirements to tailor regulations to their unique economic and labor conditions. This allows for flexibility, better worker protection, and the ability to address specific challenges within each state’s jurisdiction. Laws change, and it is important to keep up with changes to WARN law to stay compliant. Because of this, we recommend checking the official government websites of each state to keep up with Worker Adjustment and Retraining Notification Act-related news.

State WARN requirements by state

Here’s a list of states with their own specific requirements regarding the WARN act:

Other:

  • Virgin Islands Mini-WARN Act

WARN Act Minimum Number of Employees

The federal WARN Act applies to employers with 100 or more full-time employees, excluding those who have worked less than six months in the last 12 months or work an average of less than 20 hours per week. Part-time employees are also included in the calculation, with their hours aggregated to determine full-time equivalents.

Is a WARN notice required with a series of smaller layoffs?

WARN may be triggered in the case of a series of smaller layoffs, but it depends on the timing. Consecutive job losses within 90 days of each other will be aggregated and may require a WARN notice to be issued to employees. That is, unless the employercan prove that the job losses resulted from distinct causes and were not an attempt to evade the state’s WARN requirements.

Layoff Requirements

Employers covered by the WARN Act must provide affected employees with a written notice containing specific information, including the date of the planned action, reasons for the layoff, and information about employee rights. This notice should be given to affected employees, their representatives (such as unions), and appropriate government entities.

WARN Layoff Rules

The 60-day notice requirement is a central tenet of the WARN Act, but there are exceptions to this rule. Employers may provide less than 60 days’ notice if the layoffs result from unforeseeable business circumstances or if the employer is actively seeking capital or business, which, if obtained, would enable the company to avoid or postpone the layoffs.

How do companies protect themselves during a layoff?

There are three defenses provided under WARN that can create an exception to the full 60-day notice obligation. These are:

1. Faltering company
2. Unforeseen business circumstances
3. Natural disaster

Nevertheless, these defenses require careful consideration of the specific facts and should be discussed with legal counsel.

Why is the WARN Act Important?

The Act serves multiple purposes, primarily ensuring that employees have sufficient time to prepare for job loss and giving them an opportunity to find alternative employment. Additionally, the act encourages open communication between employers and employees, fostering a sense of trust and fairness in the workplace. Compliance with the WARN Act is not only a legal obligation but also a strategic move for companies to maintain a positive employer brand and employee relations.

Worker Adjustment and Retraining Notification Act of 1988 Purpose

The primary purpose of the Act is to provide workers and their families with transition time in the face of significant employment changes. By requiring employers to give advance notice of mass layoffs or plant closings, the act aims to mitigate the impact on employees’ lives. The act allows them to seek new employment, participate in retraining programs, and make informed decisions about their future. Visit the official DOL pages to read more about the act as an employer.

Offboarding employees during a layoff

Navigating the WARN Act is a critical responsibility for HR managers. Compliance ensures a fair and transparent process during times of significant workforce changes. By understanding the requirements, protecting the rights of employees, and fostering open communication, HR professionals can successfully navigate the complexities of the WARN Act, contributing to a positive workplace culture and maintaining compliance with federal and state regulations. Once employees have been notified of upcoming layoffs, the next big task is beginning the employee offboarding process.

Offboarding with Factorial:

Factorial simplifies the offboarding process, streamlining tasks and ensuring a smooth transition for departing employees. With Factorial, you can efficiently manage exit procedures, such as collecting company assets, updating access permissions, and conducting exit interviews. Offboarding software simplifies the entire process from start to finish.

Key Features for offboarding during layoffs:

1. Clear Communication: Easily communicate departure details to the departing employee, including the last day of work, return of company property, and other essential information.

2. Task Automation: Automate offboarding tasks, such as revoking system access, updating records, and notifying relevant departments, saving time and minimizing the risk of oversight.

3. Documentation and Compliance: Ensure compliance by generating necessary documentation, such as termination letters and exit surveys, helping you maintain a comprehensive record of the offboarding process.

4. Access Control: Centralize access control management, making it simple to revoke access to company systems and confidential information, safeguarding your organization’s data.

By utilizing Factorial for offboarding, HR managers can enhance efficiency, maintain compliance, and provide a positive experience for departing employees.

Book a free demo call to learn more!

Benjamin McBrayer
Did you like this article? Benjamin McBrayer has been a Content Writer for 5 years. He specializes in HR strategy and workplace trends. Check out Factorial's blog for more of his posts on time management in the office, productivity, and HR news.

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