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HR MATTERS E-TIPS
THIS WEEK'S E-TIP: Layoffs When Do You Have to WARN Employees?
October 9, 2007, Volume 9, No. 41
Published by Personnel Policy Service, Inc.
"Your Policy and Compliance Experts Since 1972"
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THIS WEEK'S E-TIP: Layoffs When Do You Have to WARN Employees?
You are generally not required to give your employees advance notice of
every layoff. However, you need to know when the WARN Act applies
and what it requires you to do. |
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THIS WEEK'S E-TIP: Layoffs When Do You Have to WARN
Employees?
Are you confused about your obligations under the Worker
Adjustment
and Retraining Notification Act (WARN Act), and particularly
about when
the Act applies? Many employers mistakenly believe all employers
are
covered and that the Act applies even to layoffs involving just
a few
employees. (Download
a free Layoff and Recall model policy with HR
best practices and
legal documentation.)
However, the law only requires employers to provide advance
notice of
certain large-scale layoffs and plant closings. The purpose of
the notice
is to give affected employees extra time to obtain alternative
work or job
training and to alert local assistance agencies. Below is a
summary of
the Act's requirements and four questions to ask to determine
whether
you must give notice of layoffs and closings.
* Small Employers and Small Layoffs Not Covered *
Two important facts to understand about the WARN Act are that it
does
not apply to all employers and it does not apply to every
termination you
may characterize as a layoff. In fact, the Act, found at 29
U.S.C. §§2101,
et seq., applies only to employers with 100 or more employees.
Plus, it
only requires covered employers to provide 60 days' advance
written
notice of certain larger-scale layoffs and facility closings
that will cause
an "employment loss" at a single work site during any 30-day
period.
Specifically, covered employers must provide notice of layoffs
that will
affect (1) one-third of the workforce and at least 50 employees;
or (2)
500 or more employees (regardless of whether this constitutes
one-third
of the workforce). In the case of a facility closing, covered
employers
must give notice if it will cause an employment loss for 50 or
more
employees. The notice must be provided to affected employees or
their
union representative and to your state's dislocated worker unit.
The term "employment loss" is defined in the WARN Act as an
employment termination, a layoff exceeding six months, or a
reduction in
hours of work of more than 50% during each month of any
six-month
period. Employment losses that are less than the minimum
described
above, but which occur within any 90-day period and which, in
aggregate, exceed the minimum may be considered a plant closing
or
mass layoff. An exception applies if the employer can show that
the
losses are the result of separate and distinct causes.
In determining the number of affected employees, the WARN Act
excludes from consideration retirees, persons terminated for
cause,
employees accepting transfers to another employment site, and
employees offered a transfer to a site within a reasonable
commuting
distance. The Act and its regulations also include detailed
definitions of
the terms used, specify what must be in the notice, and provide
exceptions to the notice requirement.
The required 60-day notice period may be reduced in three
situations: (1)
in the case of a plant closing of a "faltering company;" (2) if
the plant
closing or mass layoff results from unforeseeable business
circumstances; and (3) if a mass layoff or plant closing is the
result of a
natural disaster such as an earthquake, hurricane, flood, or
drought. In
these circumstances, the employer still is required to give
notice as soon
as is practicable. |
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* Notice Requirements *
To satisfy the WARN Act notification requirement, notice must be
given
to the representative of the affected employees, or if there is no
representative, to each affected employee; to the state dislocated
worker
unit; and to the chief elected official of the unit of local
government in
which the closing or layoff occurs. (Download
a free Layoff and Recall
model policy with HR best practices and
legal documentation.)
The notice to employees must contain:
- the name and address of the plant site where the closing or
layoff will occur;
- the name and phone number of a company representative to
contact for further information;
- a statement regarding whether the separation is expected to be
permanent or temporary;
- the expected date of the first separation and an anticipated
separation schedule;
- the job titles of the positions to be affected by the layoff;
and
- the names of the persons currently holding those positions.
The expected date of the first separation may be given as a
specific date
or as a 14-day range. The notice may be conditioned on the
occurrence
or nonoccurrence of a particular event, such as the renewal of a
contract.
If the notice is provided less than 60 days before the date of the
anticipated closing, the notice also must include an explanation of
the
reduced notice period.
If you do not satisfy the 60-day notice requirement, the employer
may be
liable for back pay for the 60-day period. You also may be liable
for civil
penalties and reasonable attorneys' fees and costs.
Note, too, that several states also have passed WARN Act-type laws
that
require advance notice to employees or to state workforce officials
concerning mass layoffs, relocations, or terminations.
* Four Questions to Help Determine Coverage *
One of the biggest problems employers have complying with the WARN
Act is the initial determination of whether the layoff and closing
decisions
will result in large enough job losses to trigger coverage. So, if
you are
faced with a layoff or are closing an office or plant, you should
ask the
following four questions to determine if the WARN Act applies:
- Do you have a 100 or more employees? If not, you're not
required to comply with the Act.
- How many employees will be affected? Remember, not every
layoff or closing triggers the WARN Act. A fairly large number of
employees need to be affected before the Act's notice provisions
apply.
So, if you are closing a small branch office or laying off just a
few people,
your organization will not be covered. As a general rule, you
should not
be concerned about the Act unless you predict that job losses will
affect
at least 50 or more employees.
- Will "employment loss" occur? Employment loss is defined very
specifically by the WARN Act. As a reminder, it covers only
terminations
(other than voluntary quits, discharge for cause, or retirement),
a layoff
that exceeds six months, or a reduction in the hours employees
work by
more than 50% during each month of any six-month period.
- Have you had multiple employment losses in a 90-day period?
Even if you do not have a single layoff or closing that seems to
meet the
WARN Act criteria, if you have several events within a 90-day
period,
you may still trigger coverage.
By answering the above questions, you can begin to evaluate
whether
your layoff or closing will be covered by the WARN Act. (Download
a free
Layoff and Recall model policy with HR best practices and
legal documentation.)
However, the Act is complicated and can be difficult to implement.
So, if
there is a chance you are covered, you should consult an attorney
who has
experience in dealing with the Act.
And, if you still have any doubts about your coverage, you may want
to
be cautious and provide notice anyway. The Department of Labor
advises employers that are uncertain about the length of a layoff,
or the
number of people involved, to send the WARN Act notice as a
precaution
to avoid potential violations. |
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^^^^^^^^^^^^^^^^^^^^^ From Your
HR Matters E-Tips Editors
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Subscribers to the
Personnel Policy Manual and HR Policy Answers on
can find more information about the WARN Act requirements, in
Layoff and Recall, Chapter 210, note 19.
Not a subscriber? If you would like to order one of our policy
chapters,
go to:
http://www.hrpolicyanswers.com.
If you have any questions, please call us at 1-800-437-3735. We'll
be
happy to help you. |
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Information provided in HR Matters E-Tips is researched and reviewed
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