Basic Requirements of the Worker Adjustment and Retraining Notification Act (WARN)

Published November 6, 2007

As the housing slump continues, employers in financial services and construction are laying off parts of their workforce to combat bad business. The auto industry isn't faring any better. In fact, according to the Bureau of Labor Statistics (BLS), manufacturers accounted for almost half of all workers involved in mass layoffs in September, with transportation equipment manufacturing (e.g., motor vehicle components and parts) leading that pack (not seasonally adjusted).

BLS also reports that, for the first nine months of 2007, mass layoffs involving 50 or more workers at a single establishment numbered 11,114 (seasonally adjusted); for the same time period last year, there were 10,221.

Most employers experiencing mass layoffs are required to comply with the federal Worker Adjustment and Retraining Notification Act, more commonly known as WARN. In short, employers must provide employees with 60 days' advance notice of the layoff. These are the basic requirements.

Employers covered: Employers with 100 or more employees.

Events that trigger WARN: A plant closing (permanent or temporary) affecting 50 or more full-time employees at a single site; a layoff of 500 or more full-time employees at a single site; a layoff of 50-499 full-time employees that constitutes 33% of the total active workforce at a single site.

Employees who must be notified: Employees who are terminated or laid off for more than six months or who have their hours reduced 50% or more in any six-month period as a result of the plant closing or mass layoff; employees who may reasonably be expected to experience an employment loss as a result of a proposed plant closing or mass layoff; employees who are on temporary layoff, but have a reasonable expectation of recall; and part-time employees.

Employees who do not need to be notified: Strikers, or employees who have been locked out in a labor dispute; employees working on temporary projects or facilities of the business who clearly understand the temporary nature of the work when hired; business partners, consultants, or contract employees assigned to the business, but who have a separate employment relationship with another employer and are paid by that other employer, or who are self-employed; and regular federal, state, and local government employees.

Other required notices: If employees are unionized, you need to notify the bargaining agent/chief elected officer of each affected union or local union official. Notice must also be given to the State Rapid Response Dislocated Worker Unit, as well as to the chief elected official of the local government where the closing or mass layoff is to occur.

Note: Some states have their own mass layoff notification laws. A summary of each state's requirements can be found in Appendix A of AHI's Complete Employee Termination Kit.

"WARN"ing To Employees

Notice to employees should include the following information:

• Whether the planned closing or mass layoff is expected to be temporary or permanent.
• Whether the entire facility is to be closed.
• When the employer expects to close the facility or begin the mass layoff, and when the employee can expect employment to be terminated.
• Whether bumping rights exist.
• The name and telephone number of a company official who can give more information.
• Any other pertinent information. Example: If a facility will only be closed temporarily, state how long it will be closed.

Don't recreate the wheel. You'll find sample notices for employees and for the government already written for you, in Chapter 2 of AHI's Complete Employee Termination Kit.

Related Topic(s): Termination/WARN - Worker Adjustment and Retraining Notification Act, Termination/Reductions-In-Force