Compliance Is Key When Implementing Employee Layoffs

What is the number one fear that makes 1 in 5 Americans lose sleep? A recent Gallup poll shows that nearly 21% of Americans believe it is “very” or “fairly” likely that they will be laid off or terminated within the next year. Many workers fear going into work one morning and being told that this is their last week. They will be left searching for a new job, attempting to learn new skills, and even worse, searching for ways to pay their bills and feed their families.

However, in 1988, the U.S. Department of Labor enacted the WARN (Worker Adjustment and Retraining Notification) Act to help prevent such short notice regarding mass layoffs or plant closings. The WARN act protects employees by requiring a 60 day notice from employers when a mass layoff or plant closure is to take place.

As an employer, it is your first responsibility to determine if you must notify employees under the WARN act. It is your responsibility if:

* a plant or location closure will result in a loss of employment for 50 or more workers.
* a mass layoff during a 30 day period will cause 500 or more layoffs.
* a mass layoff during a 30 day period will cause 50-499 employee layoffs, which results in a loss of 33% of the workforce.

be sure to comply with regulation during large scale layoffsThe above numbers include full-time employees only. If an employee works an average of 20 hours or less per week or has worked 6 or fewer months in the last year, they are not included in your total numbers. For example, if you have an employee that works between 16-24 hours weekly, you would total up their hours from the past 90 days and divide by 13 (weeks) to get an average. If the average is less than 20, they are not included in your total number of expected layoffs. However, if the number is above 20 total hours, they are then considered in the numbers.

Company X has now determined that they will be closing a location and 65 full-time workers are affected. It is now their responsibility to construct a WARN notice in clear and concise language to hand the affected employees. When creating the notice, it is important to note that the 60 day warning starts at the date of receipt. In this notice, they must address whether the layoffs or plant closure will be temporary or permanent, the expected date of mass layoffs or plant closure, bumping rights information, and contact information for a company official. Employers may voluntarily include information about possible dislocated worker assistance.

A notice must then be constructed to be given to the State Rapid Response Dislocated Worker Unit, as well as the local chief elected government official. This notice must include the name and address of the affected location, along with contact information for a company representative. The notice must also include the expected date of layoffs and whether they are permanent or temporary, names of job titles and affected number of persons, the bumping rights statement (if applicable), and contact information for employee representatives.

When constructing the notices, you may not always have an exact date. Therefore, you can offer a 14 day period in which the actions are expected to take place. If the expected layoff date extends past the time given on the original notice, a new notice must be constructed and handed out.

Some employers may attempt to evade the WARN act by placing a preprinted notice in each week’s paychecks. However, this notice is not considered acceptable. Some employers also layoff small numbers of employees over time in order to avoid “mass layoffs.” However, the WARN Act will look at losses over a 90 day period to determine if the company has followed the law. The only exception to this is if the employer can effectively prove that each layoff and event were caused by distinct, differing events.

If an employer attempts to evade or disregard the WARN Act, they can be held accountable for each laid off employee’s benefits and back pay up to a 60 day period. They can also be subjected to a civil penalty, not to exceed $500, for each day in violation.

The WARN Act regulates the official 60 day notice given to employees in an attempt to help the dislocated worker prepare for job separation, learn new skills or training, and attempt to find another position. If you are considering mass layoffs or a plant closure, be sure to determine if you are required to give a 60-day notice under the WARN Act to avoid liabilities.

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