In our latest installment of Ask the Expert, brought to you by the team of industry experts at HR Hero®, we look at a recent question from a subscriber regarding the WARN Act and the required notifications that must be provided ahead of a temporary layoff.
Q: We are a privately owned company, based in Missouri, with less than 100 employees. Do we have to follow the WARN Act regulations in the event we decide to do a temporary layoff within the near future?
A: Missouri has no state-specific layoff requirements of its own (such as a mini-WARN Act, for example), so the federal Worker Adjustment and Retraining Notification (WARN) Act applies.
The federal WARN Act requires employers with at least 100 employees to notify the Missouri Office of Workforce Development (OWD) that a layoff is impending. The OWD prefers than employers provide notice of an upcoming layoff to the Missouri WARN Coordinator and the Chief Local Elected Official (CLEO) of where the layoff will occur 60 days before the first layoff date.
It appears from the information you provided that the employer does not meet the minimum requirements for the WARN Act since the employer has less than 100 employees.
Please note that while the employer is not subject to the requirements of the WARN Act in this case, there is some some general information that employers should be aware of in situations where it is subject to WARN Act requirements in the future.
Who Must Worry About the WARN Act and Why?
When economic times are tough, workforce reductions are an unfortunate and sometimes unavoidable part of doing business. If you’re contemplating a layoff or reduction in force, closing a business, or even scaling back employees’ hours, you need to be aware of your requirements under the WARN Act.
The WARN Act applies to employers with 100 or more full-time employees. “Employees” include hourly and salaried workers as well as managers and supervisors. Part-time employees aren’t counted – that includes those who have worked less than six of the last 12 months or spend an average of less than 20 hours a week on the job.
If the WARN Act applies to a company, then that company must give 60 days’ advance written notice of discharges that result from plant closings or mass layoffs. The advance notice is meant to give workers and their families a transition time to seek other jobs or enter training programs.
If a company fails to give the required notices, employees can recover pay and benefits for the period in which notice wasn’t given (up to 60 days), and the company may be subject to an additional civil penalty of up to $500 for each day of the violation.
When Must a Company WARN?
The WARN Act can be triggered in a variety of circumstances, many of which aren’t commonly known or obvious from simply reading the WARN Act. To begin with, you should know that the law applies only to layoffs at a “single site of employment.” That means that it’s triggered only by events affecting a specific geographic location or locations that are physically located next to one another.
For example, if you manage two facilities on opposite sides of town, they’re treated separately under the WARN Act. Layoffs at one site wouldn’t be counted with layoffs at the other. Also, the Act applies to the closing of a particular work unit within a single site of employment, not just the closing of the entire site.
The two main triggering events under the WARN Act are:
- Plant closings: a temporary or permanent shutdown of an employment facility or a particular work unit resulting in the employment loss of 50 or more employees during any 30-day period; and
- Mass layoffs: any employment loss at a single employment site during any 30-day period that results in either:
- a reduction of at least 50 employees who make up at least 33 percent of the active workforce at that site; or
- a reduction of 500 or more employees.
Employers relying too heavily on the 30-day periods above may find themselves in serious trouble because of the WARN Act’s aggregation rule. That rule prevents employers from firing several small groups of employees over a long period of time to avoid the notice requirements.
You should be forewarned that two or more groups of separations over any 90-day period can be counted together to trigger the Act’s notice requirements. That’s the case even when the number of employment losses in any single group of laid-off workers would otherwise be less than the minimum number needed to trigger notice.
What you need to be aware of is that any employment losses within any 90-day period might be added together to meet the WARN Act’s threshold levels – unless you can show that the discharges were the result of separate and distinct actions and causes.
WARN Act requirements might also apply if you’re considering a relocation or consolidation of all or part of your business to another site. If the threshold number of employees will be discharged because of the relocation, you’ll need to give notice. But no employee suffers an employment loss from a relocation if:
- You offer to transfer the employee to a different job site within a reasonable commuting distance; or
- You offer to transfer the employee to any other employment site – regardless of distance – and the individual accepts within 30 days of the offer, the plant closing, or the layoff, whichever is later.
The WARN Act will still be triggered in either of the above events if more than a six-month break in employment will occur.
What Discharges Will Count Toward the WARN Act?
You don’t have to count terminations for cause, voluntary departures, or retirements as employment losses. Further, an employment loss doesn’t result from closing a temporary facility or completing a particular project – but only if the affected employees were hired with the understanding that their employment was limited to the duration of the facility or project
WARN Act watchers should also be wary that temporary layoffs and reductions in work hours can be counted as an employment loss. The Act’s definition of “employment loss” includes temporary layoffs exceeding six months. Even if a temporary layoff isn’t scheduled to last longer than six months, you can still fall within the Act if the layoff does in fact extend beyond that period.
Also, employment loss includes a 50 percent or greater reduction in an employee’s work hours during any six-month period. Thus, temporarily closing a facility or even scaling back production may bring you under the WARN Act’s scrutiny if the threshold number of employees experiences an employment loss. Understanding what constitutes an employment loss is essential to staying in compliance with the law.
Whom Must an Employer WARN?
If the WARN Act applies to an employer, it must provide 60 days’ written notice to the following:
- All affected employees and their bargaining representative;
- State Rapid Response Dislocated Worker Unit
- Chief elected official of the unit of local government in the area where the employer’s closure or layoff will occur
You must give the notice to all employees who you reasonably expect will be let go because of the closing or mass layoff. Affected part-time employees need to be given notice even though they aren’t counted toward the threshold numbers triggering the notice requirement.
The Act is specific about what the notices must contain, and the required content depends on the recipient. An employer should consult the WARN Act and the U.S. Department of Labor’s regulations to find out what should be contained in each notice.
Employers should always be aware of their responsibilities under the WARN Act when they are reducing work hours, closing a facility or work unit, or conducting a large reduction in force. Failure to do so may result in extensive liability to those employers.
Employers should especially be aware that several reductions in force culminating in 50 or more layoffs in any 90-day period may trigger the Act’s notice requirements. There are very few exceptions or defenses to the law and the employer’s obligation to provide mandatory 60-day notices. When possible, planning layoffs and closings in advance is an employer’s best bet to limit liability.
Due to the complicated nature and high liability to employers concerning the WARN Act, you should review this case with your local labor law attorney before taking any action.
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