The Worker Adjustment and Retraining Notification (WARN) Act is a labor law in the United States that stipulates that certain large employers provide 60 days’ advance notice of closures and mass layoffs. 

The WARN is a notification that’s designed to allow employees, families, and communities time to prepare for job losses by seeking new employment or training.

What is the WARN Act?

The WARN Act applies to private and non-profit businesses that have a workforce of 100 or more full-time employees, or 100 or more employees, including part-time workers, who work a total of at least 4,000 hours per week, excluding overtime. 

Eligible employers are required to trigger a WARN notice if a plant is set to be shut down in a decision that would affect 50 or more full-time employees within 30 days. 

Additionally, employers must provide a WARN notice if layoffs of at least 500 full-time employees are to take place. Businesses are also obligated to provide a notification if 50-499 full-time employees are to be laid off if they make up at least 33% of the site’s workforce within a 30-day period. 

If an employer makes a series of layoffs over a 90-day period that approach these thresholds, they may also be required to provide a WARN notice to affected employees.

Who Receives a WARN Notice?

When the WARN Act needs to be carried out, notice must be sent to affected employees or their union representatives, the State Rapid Response Dislocated Worker Unit, and the chief elected official of the local government where the plant is located within the designated notice period.

Exceptions to the WARN Act

In certain exceptional circumstances, employers will be exempt from having to provide a WARN notice to affected employees within the 60-day advance notice period. In the following cases, shorter notice periods are allowed, but notice is still required: 

  • Unforeseen Circumstances: If employees are to be laid off due to sudden, unexpected events outside the employer’s control, WARN notice periods can be shorter. 
  • Severe Financial Challenges: If your company is faltering, shorter notice periods can be applied for by employers seeking capital or business where notice would prevent securing it.
  • Natural Disasters: If a natural disaster forces you to carry out layoffs as a direct result, then shorter notice is allowed.

Penalties for Noncompliance

If an employer opts to lay off at least 500 employees or 33% of their workforce without providing a WARN notice and offering sufficient time to prepare, there can be violation penalties.

Notably, employees are free to sue for up to 60 days of back pay and benefits if they’re not handed a sufficient WARN notice. 

Employers are also liable to pay up to $500 per day in civil penalties for failing to notify the relevant local government.

FAQs

The WARN Act specifically applies to hourly and salaried workers, including managerial and supervisory employees. 

While the act covers a broad range of workers, employees who work less than 20 hours per week or have worked for the company for less than six months aren’t protected.

Yes. If the sale of a business leads to the permanent closure of plants or mass layoffs, then the employer must trigger a WARN notice for all affected employees and relevant parties.

Be sure to document your processes to protect against a possible WARN dispute between your business and an employee. The more you document the actions you’ve taken to comply with the act, the better positioned you’ll be to defend yourself against challenges.