The WARN Act: What Is It and Who Must Comply With It?

May 7, 2020   Print PDF

By Duffy G. Romnor and Krista Nelson Slosburg | Related Practice: Employment

As concerns about the economic downturn persist, many businesses are belt-tightening and making difficult decisions when it comes to their employees. Hours reductions, salary cuts, furloughs, and layoffs are some of the many ways that businesses have responded to forced closures and the general slowdown of business. shelves in a warehouse

Employers considering layoffs should keep in mind some of the statutory provisions that could be triggered by their actions. In our two-part series on layoffs, we first address the Worker Adjustment and Retraining Notification Act (“WARN Act”). Our second summary will cover the Older Workers Benefit Protection Act (“OWBPA”).

The WARN Act: What Is It and Who Must Comply With It?

The WARN Act is a federal law that requires certain businesses to provide advance notice of any “employment losses” before they take place. Many states have mini-WARN acts that apply in that state only. Employers in these states must comply with both the federal and state WARN acts. Washington does not have its own mini-WARN Act.

Are you an employer who must comply with the WARN Act?  In general, you must comply with the WARN Act if you have 100 or more full-time employees.

When does an employer need to worry about the WARN Act?  If you are covered by the WARN Act, compliance is triggered when there is a plant closing or a mass layoff.

A plant closing occurs if there is (a) an employment loss of at least 50 employees; (b) during any 30-day period; (c) that is due to a permanent or temporary shutdown of a single site of employment.

The more common scenario is a mass layoff. A mass layoff occurs if there is (a) an employment loss of at least 50 employees if the laid off employees make up at least 33% of the active workforce; (b) the employment loss is at a single site of employment; and (c) the employment loss occurs during any 30-day period.

There are also rules covering incremental employment losses of less than 50 employees over a 90-day period (aka the “90-day aggregation rule”). In general, this occurs (a) over a 90-day period; (b) when there are two or more rounds of employment losses (aka layoffs) at a single site of employment; (c) when the number of employees lost during each layoff round is less than 50 employees; but (d) the total number of laid-off employees is more than 50 and exceeds 33% of the active workforce. In this “incremental employment loss” scenario, an employer’s obligations under the WARN Act are triggered.

What does an employer need to do when the WARN Act is triggered?  In general, employers must give 60 days' written notice before ordering a plant closure or conducting a mass layoff. If they provide less notice, they must pay the affected employees for the notice period. However, the COVID-19 crisis has presented unique challenges because of the sudden significant impact it has had on many industries. Employers may be able to rely on the “unforeseeable business circumstances” exception to the general rule, which is defined as a circumstance caused by a sudden, dramatic, and unexpected action or condition outside the employer’s control (e.g, “an unanticipated and dramatic major economic downturn”).

It is important to remember that even if an employer qualifies for an exception, the employer must give as much notice as possible, even if that notice is after the fact.

Who must receive WARN Act notice?  Written notice of a plant closure or a mass layoff must be given to (1) each affected employee (or to the union representative of each employee), (2) the State, and (3) the elected official of the local government where the closing or layoff will occur (aka the local work source office).

In Washington, notice must be sent to the Employment Security Department’s Grants Management Office (via mail and email).

What must WARN Act notices say?  The exact contents of WARN Act notices depends on the recipient, but all notices must be specific and at least contain the following information:

    • statement about whether the planned action is expected to be permanent or temporary;

    • statement about whether the entire plant is to be closed;

    • the expected day of the first job loss;

    • anticipated schedule for job losses;

    • the name and address of the employment site where the mass layoff or plant closing will occur;

    • the name and phone number of a company official to contact for further information; and;

    • if the employee is being given less than 60 days’ advance notice, a statement of the circumstances that prevented the employer from giving earlier notice.

If you have questions regarding layoffs or compliance with the WARN Act, contact a member of the Stokes Lawrence Employment Group.