Given the current state of our economy, layoffs are becoming more and more common. Employers not typically impacted to this degree are faced with tough decisions about cutting costs, including the option of reducing or eliminating the company’s workforce. Because of the many concerns and worries employers have when faced with cash flow issues, typically the last thing considered are the laws impacting the workplace. Unfortunately, there is a federal law known as the Worker Adjustment and Retraining Notification (WARN) Act that applies when an employer lays off or terminates employees for lack of work, and the damages for violating the WARN Act can be very costly.
The WARN Act is intended to provide employees and local and state government with advance notice of layoffs and plant closures that will result in a material loss of jobs. The general rule is that employers with more than 100 employees are typically required to provide notice at least 60 days prior to making a decision that will result in an “employment loss.” An “employment loss” includes a plant closure affecting at least 50 employees, a layoff at a single site of employment that impacts at least 33% of the employer’s workforce (so long as that totals at least 50 employees), a layoff at a single site of employment that impacts 500 employees, or a reduction in work hours of at least 50% for a 6-month period.
As is typically the case, the law is more complicated than it first appears because of numerous defined terms, several exceptions, and a variety of court opinions that have refined the law over the years. Consequently, any employer with at least 100 employees should consult an experienced employment attorney before making any decisions that would result in a loss of jobs.
