What is the WARN Act?
The WARN Act is a law that protects workers from the impacts of unexpected loss of employment by requiring employers to give notice to employees. The WARN Act defines loss of employment as employment termination, a layoff exceeding six months or the reduction of working hours by 50% in six months.
The WARN Act requires employers to give employees 60-day notice when:
- Closing a facility will lead to loss of employment for at least 50 employees. However, this notice does not cover employees who are employed for 20 hours a week or less, or employees who have worked less than six months for a company.
- At least 500 employees who work on an employer’s site for 30 days will be laid off. The employees who will be laid off should comprise at least 33% of actively working employees at the employer’s site. The act does not cover employees who have worked for less than six months or those who work less than 20 hours a week.
The act also requires that employers notify employees affected by the sale of a business or one of its parts. In this case, the employer must provide at least 60 days’ notice. Other expectations include:
- The seller must provide notice before the sale date and time. The buyer must provide employees with a notice of a plant closure or mass layoff after the sale date and time.
- The employees of the seller will immediately become the employees of the buyer after the sale.
- The notice should also inform any affected areas of the sale date and time.
- If the sale of the business will not result in plant closure or mass layoff, employers are not required to give notice.
The purpose of the WARN Act
The WARN Act gives employees and their families time to prepare for a loss of employment. Employees have time to look for new jobs and are expected to obtain training in a new skill or retrain existing skills to secure replacement work.
How to avoid WARN penalties
Issue a WARN notice if you are required to do so. Employers who violate the WARN Act may be liable for paying employees back pay and benefits for the violation period.
Employers who do not notify local governments are subject to civil penalties of up to $500 for each day of violation. Penalties can be avoided if employers compensate employees within three weeks of closure or layoff.
Employers need to follow state and federal employment laws. Be sure to stay current with the WARN act requirements as well as employment laws in your jurisdiction. Doing so is beneficial for you and your employees.
Here are answers to some more questions you may have about the WARN Act:
