What’s the WARN Act?
The WARN Act, or Worker Adjustment and Retraining Notification Act, is a federal law that requires employers to provide notice to affected employees when conducting layoffs or plant closings.
According to the WARN Act, employers with 100 or more employees must give their employees at least 60 days of advanced notice before mass layoffs or plant closings. For employers with fewer than 100 employees, there’s a requirement to give 30 days of advanced notice.
The law also requires employers to provide information about job retraining services and other benefits available to affected employees. Overall, the WARN Act aims to ensure that workers are not left without income or resources due to mass layoffs or plant closings.
The WARN Act has come up in the news recently because of the recent layoffs at Twitter after Elon Musk took over the company. Musk acquired Twitter on October 27, 2022, and on November 3rd, hundreds of employees were notified via email that they were being laid off. Five current or former Twitter workers sued the company in the wake of the layoffs and alleged it had violated WARN.
Musk defended the layoffs soon afterward, saying all workers were provided three months of severance pay, which is 50% more than legally required. The lawsuit is ongoing, so it remains to be seen who the courts will side with. However, it shows what can happen when mass layoffs aren’t handled in the best way.
We’ll tell you what you must know about the WARN Act, including what companies must comply with.
The Basics of the WARN Act
WARN protects workers by requiring employers to provide advance notice of significant workplace changes and aiding impacted workers. It’s a federal law that covers workers in all 50 states.
The Act requires employers with at least 100 full-time employees to provide at least 60 days advance notice of mass layoffs or plant closure. This advance notice can give employees time to prepare for the transition and look for new jobs.
Employers subject to WARN must notify other affected parties, such as state and local governments, and provide workers with information about their rights under the Act. By offering workers advanced notice of mass layoffs and plant closures, WARN helps soften the impact of these events on workers and their families.
Employers who do not meet the criteria set forth by the WARN Act are not legally required to provide notification in the event of mass layoffs. The WARN Act applies to mass layoffs of 500 or more workers or between 50 and 499 workers if they make up at least 33 percent of the employer’s workforce.
Employers who fail to comply with the WARN Act may be required to pay back wages and benefits for up to 60 days in addition to civil penalties for each day of violation. Mass layoffs of employees can lead to high financial costs for employers who do not comply. This can be a substantial financial strain on employers, so organizations must understand their obligations under the WARN Act and the potential consequences of noncompliance.
The Act also requires companies to notify workers of the sale of the business or one of its parts. In that case, the company must provide at least 60 days’ notice. The company must provide notice before the sale date and time, and the buyer must notify workers of a plant closure or mass layoff after the sale. However, if the sale of the company won’t result in a plant closure or a mass layoff, the employers aren’t required to give notice.
Are Any Exceptions to the WARN Act?
There are exceptions to the WARN Act requirements. Employers are exempt if the business has less than 100 employees, if the closing is a result of a natural disaster, or if the closing is due to unforeseeable business circumstances. Additionally, employers are not required to issue WARN notices for employment losses that last six months or less.
WARN notices must be provided to employees, unions representing employees, and state and local government agencies. Additionally, when an employer closes a temporary facility, such as a construction site, the WARN Act may not apply if it lasted no more than six months and employed fewer than 50 workers. An employer is also not required to give advance notice if they have less than 6 months of operations left in the calendar year in which they would have been subject to WARN requirements.
If an employer doesn’t provide the notice, they may be subject to penalties, including back pay and benefits for each employee affected, civil penalties of up to $500 per day, and other civil damages, such as attorney’s fees.
A court may also impose criminal penalties on people found guilty of intentionally violating the WARN Act, such as fines of up to $10,000 per violation and/or imprisonment for up to six months.
How Can Employers Ensure Compliance?
To ensure compliance with the WARN Act, employers should understand their obligations under the law and consult with legal professionals on specific WARN Act requirements if necessary.
Employers should develop a plan for complying with the law in advance, including identifying potential warning triggers and designing appropriate notification procedures. It’s also important that employers remain up to date on any changes in the WARN Act legislation so they can adjust their policies accordingly. Ignorance of the law isn’t an excuse for failing to comply. As such, employers should take the time to be familiar with the language of the WARN Act and seek legal counsel when necessary.
Issuing a notice of an impending mass layoff or plant closure gives workers at least a chance to manage their finances if they face unemployment. For companies, it’s helpful to connect their workers with local opportunities for retraining. It’s also beneficial to communicate their eligibility for benefits, such as severance pay. If companies know whether the layoff is permanent or temporary, providing this information helps workers with their next steps.
In most cases, companies will contact the state’s dislocated worker unit, which helps the team be proactive in finding the employees new jobs. These local units help with unemployment insurance, career training, and other resources.
Companies that administer performance evaluations and exit interviews help give workers closure when plant closures or mass layoffs happen. It also helps clear help misunderstandings and allows workers and managers to express final thoughts and feelings about working together.
Finally, if you’re notified about an imminent layoff, it’s time to write a professional resume and LinkedIn in order and prepare for your job search proactively.
Know Your Rights
The WARN Act is intended to protect employees’ rights in a layoff or termination, and employers need to be aware of the specifics of the law and take the proper steps to ensure they are compliant. Workers should be mindful of their rights and understand how to protect them in any situation. Understanding the details of the WARN Act is essential for both employees and employers to ensure that all parties involved are treated fairly and are aware of their respective rights.
Stay tuned to our blog for more helpful career and employment insights, including articles such as The Rise of the Gig Economy, Why Work for a Nonprofit, and How to Get an Internal Promotion.