The Worker Adjustment and Retraining Notification Act (hereinafter “WARN Act”) is a federal law passed by Congress in August 1988, which was enacted to provide workers with notice before their company stopped doing business. Due to the COVID-19 pandemic, there has been a massive shift toward remote and hybrid work. Due to this shift, the WARN Act has to adopt to the new world of remote and hybrid work.
The Federal WARN Act mandates employers to provide a 60-day notice to employees before significant layoffs or closures, aimed at helping workers seek new employment or retraining. However, exceptions exist for unforeseen business circumstances like a natural disaster. The rise of remote work has necessitated clarifications on how WARN Act applies, with guidelines indicating that an employee’s “single site of employment” for WARN purposes is their home base or the site they report to. Some states have their own WARN requirements supplementing the federal law.
The highlighted cases demonstrate courts’ struggle to define a “single site of employment” for remote or traveling employees under the WARN Act. The Third Circuit’s interpretation requires a physical location where the employee reports, contrasting with the notion of a “home base” being wherever the employee primarily operates. Recent cases also expose the lack of protection for remote workers, urging for a re-evaluation of the WARN Act’s application in the modern, remote work landscape.
The New Jersey WARN Act, revised in 2023, now mandates a 90-day advance notice for mass layoffs, lowering the threshold for layoffs to 50 employees irrespective of their full-time or part-time status. It also introduced mandatory severance pay, expanded the definition of “establishment” to include all of an employer’s locations within New Jersey, and abolished the distinction between part-time and full-time employees, thus broadening the Act’s scope to cover more employers and offer better protection to employees.
The New Jersey courts have begun addressing lawsuits tied to the recent amendments in the NJ WARN Act, with one significant case being The ERISA Industry Committee v. Robert Asaro-Angelo. This case examined the potential preemption of Senate Bill 3170 by federal ERISA law, but the court denied the plaintiff’s request for summary judgment due to lack of standing. Another case, DeRosa v. Accredited Home Leaders, Inc., broadened the NJ WARN Act’s scope to include parent and affiliated companies, not just direct employers. Two other cases highlighted employers’ failure to provide adequate notice during mass layoffs, showcasing the need for adherence to both federal and state WARN Acts.
The New York WARN Act, effective from February 1, 2009, was amended on June 21, 2023, to broaden its scope and enhance employee protections during mass layoffs. Unlike the Federal WARN Act, it requires a 90-day notice period for mass layoffs, relocation, or employment loss, with more detailed information to be provided. The amendment also refined the exceptions to the 90-day notice, including changes to the faltering company exception, and included provisions addressing remote work, although it left some ambiguity regarding fully remote employees. The Act continues to exclude part-time employees from coverage and clarified definitions concerning temporary and permanent layoffs.
Recent cases like Coleman v. Optum Inc. and Rosenberg v. Boces have explored the applicability of the NY WARN Act to remote work scenarios. Coleman v. Optum Inc. delved into whether the NY WARN Act applies to remote workers outside New York, while Rosenberg v. Boces explored allegations of constructive discharge and retaliation against a remote worker. These cases reflect the evolving legal landscape concerning remote work under the NY WARN Act, highlighting the need for clearer legislative and judicial guidelines regarding remote and hybrid workers’ rights and employers’ obligations under the Act.