Worker Adjustment and Retraining Notification Act

In 1988, Congress passed the Worker Adjustment and Retraining Notification Act (WARN) to ensure that most employees would be entitled to advanced notice of a plant closing or a mass layoff. Pursuant to WARN, a plant closing occurs when a facility is shut down for more than six months or when 50 or more workers lose their jobs during any 30-day period. A mass layoff usually occurs when either 500 or more workers or at least one-third of the employer's workforce is laid off during a 30-day period.

WARN is administered by the Employment and Training Administration of the Department of Labor, which has created regulations to implement WARN.

Notice Requirement

Generally, WARN provides that employers of 100 or more workers must give at least 60 days' advance written notice to employees of a plant closing or mass layoff. If employees are covered by a collective bargaining agreement, the notice must be given to the employees' representative. If not, the notice must be delivered to each employee. Notice must also be provided to the dislocated worker unit of the state in which the plant is located and to the appropriate local government. Employers may not meet the notice requirements of WARN by including preprinted notice on the employees' pay stubs. They may, however, deliver the written notice to the employees in the same envelopes as their paychecks.

Pursuant to WARN, the notice given to an employee representative must be specific and it must contain at least the following information:

• The name and address of the site where the plant closing or mass layoff will occur, and the name and telephone number of an employer official to contact for further information;
• A statement as to whether the planned action is expected to be permanent or temporary and a statement specifying whether the entire plant is to be closed;
• The expected date of the first termination and the anticipated schedule for making terminations;
• The job titles of affected positions and the names of the workers who hold those jobs.

The notice given to employees, which must be written in language that is likely to be understood by the employees, must include the following:

• A statement as to whether the planned action is expected to be permanent or temporary and a statement specifying whether the entire plant is to be closed;
• The expected date when the plant closing or mass layoff will occur and the expected date when the individual employee's job will be terminated;
• A statement as to whether or not bumping rights exist;
• The name and telephone number of a company official.

Exceptions to the 60-Day Notice Requirements

WARN provides three exceptions to the 60-day notice requirement. The employer has the burden of proving that one of the exceptions applies.

1. Within the 60-day notice period, the employer was actively seeking capital which , if obtained, would have enabled the employer to avoid the shutdown and the employer reasonably and in good faith believed that the notice would have prevent the employer from obtaining the necessary capital or business.
2. The closing or mass layoff was caused by business circumstances that were not reasonably foreseeable as of the time that notice would have been required.
3. The plant closing or mass layoff was due to any form of natural disaster.

If an employer seeks a reduced notice period under one of the above exceptions, the employer must seek to give employees as much notice as is practicable under the circumstances.

Penalties for Noncompliance

If a non-exempt employer fails to comply with the requirements of WARN, it may be liable to pay damages to affected workers. Damages may include back pay and benefits for the period during which the required notice was not given. In addition, a civil penalty not to exceed $500 for each day of a violation may be assessed against the employer.

Copyright 2008 LexisNexis, a division of Reed Elsevier Inc.