Legal Updates

February 2005

Warn Act Basics

The Workers Adjustment Retraining and Notification Act (WARN) requires advance notice in certain situations involving plant closings and mass layoffs. Employers need to consider WARN Act requirements when planning workforce reductions in order to avoid liability.

To Whom does the Warn Act Apply?
The WARN Act applies to any business that employ 100 or more full time employees.

What does the Warn Act Apply Require?
When a covered employer engages in a plant closing or “mass layoff,” it is required to give 60-days advance notice of that action.

What is a Plant Closing?
A “plant closing” is the shutdown of a site of employment, a facility at an employment site in which 50 or more employees lose their jobs within any thirty-day period.

What is a Mass Layoff?
A “mass layoff” is a reduction in force at a single site of employment during any thirty-day period in which one third of the full-time employees are laid off and in which 50 full-time employees lose their job. Also, whenever 500 or more employees at a single site are laid off, that action qualifies as a “mass layoff.”

Warn Act Compliance
The WARN Act notification must be sent to the affected employees or to the employee’s union. The notice must also be sent to the agency of the state in which the facility is located that is responsible for programs concerning dislocated workers and to the chief elected official of the municipality in which the facility is located.

Warn Act Exceptions
The WARN Act contains limited exceptions (e.g. “unforeseeable business circumstances, natural disaster, strike or lockout, etc.) These exceptions are rarely applicable. Legal counsel familiar with the WARN Act can assess whether your company meets on of the exceptions to the WARN Act’s notice requirements.

Failure to Comply
Be proactive in seeking counsel to help determine whether the WARN Act applies to your workforce reduction. Failing to comply with the WARN Act by sending out timely notices only makes the bad situation of a workforce reduction worse by exposing you to unnecessary and costly penalties.