The Worker Adjustment and Retraining Notification Act (hereinafter “WARN Act”) is a federal law passed by Congress in August 1988, which became effective on February 4, 1988.[1] Because early intervention is shown to play an important role in successful re-employment of laid-off individuals, the WARN Act was enacted to “provide workers with sufficient time to seek other employment or retraining opportunities before closing their jobs,”[2] as well as to “ensure advance [and sufficient] notice in cases of qualified plant closings and mass layoffs.”[3]
Under the WARN Act, a covered “plant closing” is defined as “the permanent or temporary shutdown of a single site of employment, or one or more facilities or operating units within a single site of employment, if the shutdown results in an employment loss at a single site of employment during any 30-day period for 50 or more employees excluding any part-time employees.”[4] Furthermore, a mass layoff ensues when, during the 30-day period, employment loss at the single site of employment amounts to “at least 33 percent of the employees (excluding any part-time employees), and at least 50 employees (excluding any part-time employees).”[5]
The WARN Act defines the term “employer” as “any business enterprise that employs (A) 100 or more employees, excluding part-time employees; or (B) 100 or more employees who in the aggregate work at least 4,000 hours per week, which is exclusive of hours of overtime.”[6] Employers who qualify under this definition are required to provide written notice 60 calendar days in advance of covered plant closings and mass layoffs.[7]
The Act does grant some exceptions to the 60-day notice requirement where the employer:
- “was actively seeking capital or business which, if obtained, would have enabled the employer to avoid or postpone the shutdown and the employer reasonably and in good faith believed that giving the notice required would have precluded the employer from obtaining the needed capital or business.”
- was forced to close or mass layoff due to “business circumstances that were not reasonably foreseeable as of the time that notice would have been required.” The Act specifies that no notice is required if the closing or mass layoff is the result of a natural disaster.[8]
Under these circumstances, the employer should still aim at giving notice as is practicable and “shall give a brief statement of the basis for reducing the notification period.”[9]
How does the remote/hybrid workplace of today impact WARN Act obligations when there is a reduction in force? Since employees are regularly located all over the US, where are they “assigned” for meeting the WARN Act thresholds?
Courts have taken the WARN Act’s pre-existing regulations of remote workers, e.g. bus drivers and railroad workers, and applied this framework to modern workers’ remote work circumstances.In the frequently asked questions guidance, the U.S. Department of Labor (“DOL”) provided clarification regarding where a remote worker’s “single site of employment” would be for WARN Act purposes.[10] For workers “whose primary duties require travel from point to point, who are outstationed, or whose primary duties involve work outside any of the employer’s regular employment sites (for example, railroad workers, bus drivers, or salespersons), the single site of employment to which they are assigned as their home base, from which their work is assigned, or to which they report will be the single site in which they are covered for WARN purposes.”[11]
In another frequently asked question report, the DOL outlined and provided guidance for how the WARN Act is applied to employers and employees in relation to the COVID-19 pandemic.[12] The DOL addressed the following questions:
“(Q) My employer has temporarily closed due to COVID-19. Was I supposed to receive notice under the WARN Act?
- (A) Employee protections under the WARN Act apply to those who suffer “an employment loss”; a layoff (or furlough) that is “temporary” may not be an employment loss for WARN Act purposes. Under the Act, an employee who is laid off does not suffer an employment loss unless the layoff extends beyond 6 months. Therefore, a temporary layoff of 6 months or less does not trigger the need for the employer to issue a WARN Act notice. However, if the layoff lasts for more than 6 months, employees would be considered to have experienced an employment loss and would have been entitled to notice before the layoff unless it was not reasonably foreseeable at the time of the initial layoff that the layoff would extend beyond 6 months. If a layoff is extended beyond 6 months due to business circumstances, notice is required when it becomes reasonably foreseeable that the extension is required.
(Q) My employer has permanently closed due to COVID-19 but did not provide a 60-day notice stating that the loss of business from the virus was an unforeseen business circumstance. Does this violate my rights under the WARN Act?
- (A) Under the WARN Act, employers can claim an exception to the 60-day notice requirement for unforeseeable business circumstances. The exception to the advance notice requirement applies to worksite closings and mass layoffs caused by business circumstances that are not reasonably foreseeable at the time that 60-day notice would have been required. An important indicator of a business circumstance that is not reasonably foreseeable is that the circumstance is caused by a sudden, dramatic, and unexpected action or condition outside the employer’s control. This can include an unanticipated and dramatic major economic downturn. A government ordered closing of an employment site that occurs without prior notice also may be an unforeseeable business circumstance. Similarly sudden, dramatic, and unexpected action outside the employer’s control, announced and implemented swiftly, such that the employer is unable to provide 60 days’ notice may also fall within this exception to the 60-day notice requirement. When invoking an exception to the WARN Act’s 60-day notice requirement, a covered employer is still required to:
- Give as much notice to employees (or the employees’ representative(s)) and State and local government officials as is practicable (which may, in some circumstances, be notice after the fact); and 2. Include a brief statement of the reason for giving less than 60-days’ notice along with the other required elements of a WARN notice.”[13]
Even though employees physical present at the single site employment may not be affected by layoffs, the WARN Act may still be triggered even if a reduction in force impacts only remote workers. While most states follow the federal WARN Act, almost fifteen states have enacted their own layoff notice laws that are similar to the federal WARN Act.[14] New Jersey and New York are two of the states with their own WARN requirements.
[1] The Worker Adjustment and Retaining Notification (WARN) Act: Worker’s Guide to Advance Notice of Closings and Layoffs, U.S. Dep’t of Lab. Emp. and Training Admin (ETA), https://www.dol.gov/sites/dolgov/files/ETA/Layoff/pdfs/WorkerWARN2003.pdf (last visited Oct. 7, 2023).
[2] WARN Advisor, U.S. Dep’t of Lab., https://webapps.dol.gov/elaws/eta/warn/i2.asp# (last visited Oct. 7, 2023).
[3] WARN Act Compliance Assistance, U.S. Dep’t of Lab., https://www.dol.gov/agencies/eta/layoffs/warn (last visited Oct. 7, 2023).
[4] 29 U.S.C. § 2101(a)(2).
[5] 29 U.S.C. § 2101(a)(3).
[6] 29 U.S.C. § 2101(a)(1).
[7] 29 U.S.C. § 2102(a).
[8] 29 U.S.C. § 2102(b).
[9] 29 U.S.C. § 2102(b)(3).
[10] Worker Adjustment and Retraining Notification Act Frequently Asked Questions, U.S. Dep’t of Lab., https://www.dol.gov/sites/dolgov/files/ETA/Layoff/pdfs/WARN%20FAQ%20for%20COVID19.pdf (last visited Oct. 7, 2023).
[11] The Worker Adjustment and Retaining Notification (WARN) Act: Employer’s Guide to Advance Notice of Closings and Layoffs, U.S. Dep’t of Lab. Emp. and Training Admin (ETA), https://www.dol.gov/sites/dolgov/files/ETA/Layoff/pdfs/_EmployerWARN2003.pdf (last visited Oct. 7, 2023).
[12] Worker Adjustment and Retraining Notification Act Frequently Asked Questions, supra note 20.
[13] Id.
[14] Noah Jennings, ANALYSIS: As Layoffs Rise, Employers Must Heed State WARN Laws (1), Bloomberg Law (Dec. 12, 2022, 5:00 AM), https://news.bloomberglaw.com/bloomberg-law-analysis/analysis-as-layoffs-rise-employers-must-heed-state-warn-laws.