Employers considering a layoff should keep in mind that the Worker Adjustment and Retraining Notification Act (WARN Act) places notice requirements on certain employers prior to ordering a plant closing or mass layoff. Generally, it prohibits a covered employer from ordering a plant closing or mass layoff before the end of a 60-day period, commencing when written notice is provided to employees of the plant closing or layoff. Several provisions of the WARN Act limit its coverage, arising in the context of exemptions, exclusions, reductions and in the definitions of various terms used in the Act. Employers also need to consider state WARN laws, which may have stricter requirements and greater penalties.
Catherine S. Weil, director of labor relations and employment law for Albertson's, LLC, advises employers to involve human resources and labor relations professionals well in advance of a planned workforce reduction, so that they can determine if the federal or any state WARN Act provisions apply. "This is particularly true since in some circumstances under the federal WARN Act, small layoffs that do not otherwise qualify for WARN notice may, over a period of time, be aggregated to meet the WARN thresholds," she cautioned.
A covered employer under the WARN Act is one that employs 100 or more full-time employees. "A full-time employee under the Act is an employee who has worked for six out of the last 12 months for the employer, and works an average of 20 hours or more per week, with average hours being measured during the 90-day period before WARN notice is to be given," Weil explained.
A covered mass layoff is one occurring at a single worksite that results in employment loss to:
- 50 or more employees who constitute at least a third of the full-time employees at that site; or
- 500 or more full-time employees, regardless of the total number of employees at that site.
Worksites may be aggregated together under certain circumstances, such as when there is sharing of employees, common human resources/labor relations functions and overlapping management between worksites. Moreover, in a union environment, multiple worksites may need to be considered if "bumping rights" exist between locations.
Transfer offers of comparable employment at another work location within a reasonable commuting distance can be excluded from WARN Act calculations, even if the employees do not accept the offer. Accepted transfer offers beyond a reasonable commuting distance can also be excluded. As a rule of thumb, 30 miles is generally considered a reasonable commuting distance.
The detailed requirements for WARN-compliant notice are found at 20 CFR §639.7. When the WARN Act applies to a reduction in force, written WARN-compliant notice must be provided to:
- all employees of the worksite, whether full-time or not;
- the state dislocated worker unit;
- the chief elected official for the city or area in which the worksite is located; and
- if the workplace is organized, the union, in lieu of the employees.
While not required for unionized workforces, Weil recommends that employers also give employees individual written notice in addition to the union representative.
Source: CCH HR Ideas and Trends, No. 697, April 1, 2009.