The federal Worker Adjustment and Retraining Notification (WARN) Act gives employees the right to a 60-day notice period before a large-scale layoff or plant shut down. If employers fail to give the appropriate notice to employees or their representatives, they may be required to pay the affected employees’ back salaries and benefits or face fines of up to $500 per day of violation.
It is not always easy to determine if an employer is covered by the WARN Act. Understanding how to follow layoff protocol can protect companies from an unexpected fallout.
Only large employers are subject to the WARN Act and what constitutes a large employer may be cause for confusion. For example, an employer must employ at least 100 full-time workers or have at least 100 employees who work a combined total of 4,000 hours per week. However, the definition of what constitutes full-time varies. For the purposes of WARN coverage, full-time employees are those who work at least 20 hours per week and have been employed with the company for at least six months. Full-time employees can be paid a salary or on an hourly basis.
Once an employer is covered under WARN, layoff notice will be required in the event of a worksite shut down that results in the loss of employment for 50 or more people during a 30-day period. If the site that was closed was a temporary location, no notice is required.
A covered employer must provide notice if a layoff will result in an employment loss of 500 or more employees during a 30-day period. No notice is required when layoffs occur due to the completion of a job or project.
For those subject to the WARN Act who plan to sell their business, notice will be required if that sale results in a closing or mass layoff. However, if the closing or mass layoff occurs after the sale, the new owner will be responsible to provide notice.
There are several circumstances where employers are not required to give notice or can provide notice with less than 60 days lead time. For example, an employer does not need to provide notice to those on strike or to workers who are part of a lockout.
There are also three circumstances under which an employer can give less than the required 60-days’ notice; though the employer may be required to provide evidence that the condition existed.
If a company does shorten their notice period due to any of the above circumstances, when the official written notice is given, it must include the reason for the delay.
For more information on how the federal WARN Act affects your company or for assistance with any corporate-related matter, contact an experienced Malvern business attorney at MacMain Leinhauser by calling 484-318-7106 or contact us online.