Avoiding Legal Problems with a Layoff

Every employer must carefully comply with the various state and federal laws passed to protect basic worker rights. In regards to employee layoffs, the most important protective legislation is that contained in The WARN Act. The federal WARN Act (The Worker Adjustment and Retraining Notification Act) became effective in February 2009. Prior to that date, far fewer American workers enjoyed a statutory right to receive at least 60 days of notice before an employer could close a plant or lay them off their jobs.

Employers who must generally comply with the various WARN Act provisions include:

1. Businesses that employ 100 or more employees
2. Businesses set up as private, for-profit employers, non-profit employers; non-profits and public and quasi- public entities. (The act does not cover most federal, state and local government agencies that provide public services.)
3. Both hourly and salaried workers, as well as supervisory and managerial employees. (See the Department of Labor’s summary of The WARN Act’s provisions).

Many states have passed their own versions of The Warn Act, with some of them extending coverage to employers with fewer than 100 workers.

Specific Benefits of the WARN Act

It’s obviously difficult for most workers to lose their jobs without any advance notice. Far too many Americans work "from paycheck to paycheck," without any sizable savings to tide them over during a time of crisis.

Fortunately, for over 10 years now, the WARN Act has provided thousands of workers with advance notice (often 60 days) of their impending layoffs and put them in touch with useful state and local job hunting services. Important penalties were also included in the act. Therefore, if an employer fails to provide the required notice to its workers, that employer must pay each worker the equivalent of that individual’s back pay and benefits (up to sixty days) covering the time period when notice should have been given. (Other penalties may apply when an employer fails to timely notify the state and local governments that will be most affected by its impending plant closing or layoffs).

The Warn Act’s Key Definitions

As is often true with critical legislation, the vast majority of the Warn Act’s provisions hinge on its highly specific definitions. Both employers and employees wanting to review their rights and obligations should seriously consider first carefully reviewing all of the act’s definitions before trying to understand the most basic sections of the act itself. (Of course, this is when it can be very beneficial to confer with a private attorney who specializes in employment law.) For example, a “covered plant closing” is defined as one where the plant will be closed down for over six months or where fifty or more workers will lose their jobs at one employment location during a particular thirty- day period. A “mass layoff” is defined as a job loss affecting at least 500 employees who will be without work for at least six months or longer. (See: 29 USC Sections 2101ff and 20 CFR 639).

When the WARN Act Does Not Apply

While many workers benefit from knowing in advance that they may be laid off, others may not be protected for reasons including:

• They were working at a temporary job facility
• They were hired knowing that their job would only last for a specific period of time
• The plant closing or layoff was caused by a natural disaster.

Furthermore, certain unforeseeable business circumstances can also prevent an employer from being held liable under WARN for not providing advance notice to its workers.

Talking to an Attorney Prior to Layoffs

Few employers fully understand all of the detailed provisions of the WARN Act. For this reason, you may want to confer with an employment law attorney about all of your legal obligations to your employees under WARN (and similar legislation that may have been passed by your state legislature). If you believe your company may have violated worker rights during a recent layoff or plant closing -- or if you just want to be sure your upcoming plans to provide such notice are adequate, please either contact your company’s retained lawyer or search for one on this Web site.