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The WARN Act: Notify staff before large-scale layoffs

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in HR Management,Human Resources

THE LAW. The Worker Adjustment and Retraining Notification (WARN) Act requires certain employers to give employees 60 days notice before a plant closing or mass layoff. Some states also have plant-closure laws that add additional mandates.

Violating WARN carries some stiff penalties. You can be forced to pay up to 60 days of back pay and benefits to each affected employee, plus attorneys' fees and a $500 per-day civil penalty.

WHAT'S NEW? Lawsuits challenging WARN Act compliance have become more common in the wake of the recent layoff binge. Permanent layoffs surged nationwide from 1999 through 2001, according to the latest data from the federal Bureau of Labor Statistics.

Meanwhile, the most recent tallies continue to climb. U.S. companies announced 118,067 layoffs in August, a 46 percent rise from July, according to outplacement consultant Chal-lenger, Gray & Christmas. If job cuts continue at the current rate, 2002 will rank as the second-highest year for layoff announcements since 1989, the year Challenger began tracking them.

HOW TO COMPLY. Your company must follow the WARN Act if it has 100 or more employees, including temps. Don't count employees who have worked for you less than six months during the last 12 months or workers who average less than 20 hours a week.

What triggers you to issue a WARN notice? Two reasons:

1. Plant closing. If you close a facility that leaves 50 or more full-time employees out of work for at least 30 days, or

2. Mass layoff. If you lay off at least one-third of your work force for at least 30 days. This doesn't count for layoffs of 50 or fewer people. In addition, if you're laying off more than 500 workers, you have to notify workers regardless of whether this total meets the one-third mark.

If your company meets these requirements, it must send notices at least 60 days before a layoff to:

 

  • Each employee affected by the closing or mass layoff. If union workers are affected, send written notice to the chief elected officer of the bargaining unit.

     

     

  • The state's dislocated worker unit, which provides assistance to laid-off workers.

     

     

  • The appropriate local government official, usually the mayor or city manager.

     

     

 

While the law doesn't spell out any particular format to follow, it's best to make sure your written notices include the following five facts, at a minimum:

1. Name and address of the employment site where the layoffs will occur.

2. Name and phone number of a company official to contact for further information.

3. A statement about whether the planned action is expected to be permanent or temporary, and whether the entire facility is to be closed.

4. Expected date of the first layoffs and the anticipated schedule.

5. Job titles of positions to be affected and names of workers currently holding those jobs.

3 exceptions to notification

There are three key exceptions to the advance-notice rule. If you rely on any one of them to give less than 60 days' notice, you bear the burden of proof that it is true.

'Faltering company' exception. This applies to plant closings but not to mass layoffs. It covers situations in which a company has sought new capital or business in order to stay open and where giving notice would ruin the opportunity to get the new capital or business.

'Unforeseeable business circumstances' exception. Your company can be exempted if the layoff or plant closing was brought about by a sudden, dramatic and unexpected action or condition that's beyond your control. This could include an economic downturn, a strike at a major supplier or the sudden termination of a major contract.

'Natural disaster' exception. This applies to plant closings and mass layoffs in the wake of a natural disaster, such as a flood, earthquake or storm.

Note: Employers don't have to give notice when closing a temporary facility or if a closing or layoff results from the completion of a project. But this exemption applies only if the workers were hired knowing that their job was limited to the duration of the project.

 

Resources: The WARN Act

 

  • Get advice on WARN compliance, plus assistance for laid-off staff, at the Labor Department's site, www.doleta.gov/layoff/employers01.asp.

     

     

  • Find the contact at your state's Dis-located Worker Unit Coordinator at www.doleta.gov/layoff/e_sdwuc.asp.

     

     

  • Tap into a free, state-based "Rapid Response Services" at www.doleta. gov/layoff/employers02.asp. The service is designed to help employers manage large layoffs, but some states also offer this regulatory help and outplacement assistance to companies with fewer than 50 workers.

     

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