Are you giving employees enough W.A.R.N.ing?Michael J. Pires
March 6, 2009 — 2,010 views
As the current economic crisis escalates and businesses are being forced to restructure their operations through mergers, acquisitions or workforce reductions, many employers are faced with the unpleasant tasks of laying off some of their staff members. When workforce reductions are needed, employers must be sure to comply with certain legal requirements. One such requirements is the Worker Adjustment and Retraining Notification (WARN) Act which mandates that under certain circumstances employers provide employees with 60 days advance notice in the event of a mass layoff or plant closing.In 1988, Congress passed the WARN Act to provide workers with sufficient time to prepare for the transition between jobs. Below are some specific guidelines to ensure compliance with WARN:
1. What triggers notice? Employers are required to provide 60 days advance notice of an impending layoff when a plan facility is closing (with x number of employees or percentage of the workforce) or when a mass layoff is planned (resulting in 500 jobs being eliminated).
2. Who must give notice? The Act applies to any business enterprise that employs either 100 full-time employees or 100 or more fulltime and part-time employees who work in the aggregate at least 4,000 hours per week.
3. Notice requirements. Advance notice should be in writing and include the following elements: the name and address of the job site in which the plant closing or mass layoff will occur; whether the layoff is temporary or permanent; the expected date(s) of the closing or layoff; the number of affected workers; and the employer representative's contact information.
4. WARN exceptions. There are three exceptions in which the 60-day WARN notice is not required. The first is when the closing or mass layoff is caused by an unforeseen business circumstance (i.e., a sudden or unexpected condition outside the employer's control). The second is known as the "faltering company" exception and applies to situations in which the company is actively seeking additional funding and has a reasonable expectation that the funding will be attained and will be enough to preclude the layoff or closure. The third exception is when the layoff or plant closing is a direct result of a natural disaster such as a flood or earthquake.
5. Notification to state agencies. WARN requires employers to notify state dislocated worker units, i.e. local One-Stops so that outplacement assistance can be provided to affected employees. When adequately notified, State Dislocated Worker Units can help unlock federal job assistance programs for employees that offer services such as job placement, job search and retraining assistance, as needed. Some of these programs include the Trade Adjustment Assistance Program (TAA) and the National Emergency Grant (NEG).
6. State WARN legislation. Each state may have its own notification requirements. States that do may have regulations that apply to more employers, cover broader circumstances, or require more advanced notification. Employers operating in states with their own WARN legislation must comply with their state-specific layoff requirements; check yours in the Layoffs section of State & Federal Laws database.
7. Penalties. Employers who do not comply with the Act may be subject to the penalties. Employers who violate the WARN provisions without providing proper notice are liable to each complainant for back pay and benefits for the period of violation, up to 60 days. The employer's liability may be reduced by paying wages to the employee during the period of the violation. Additionally, employers who fail to provide the required notice to a unit of local government is subject to a penalty up to $500 for each day of violation. This penalty is preventable if the employer satisfies the liability to each complainant within 3 weeks after the closing or layoff is ordered by the employer.
Reductions in force can be stressful and unpleasant for many employees, whether an employee is directly impacted by the decision or not. It is important that during this time managers speak honestly and openly to their staff regarding how the layoff decisions were made and as well as any impending implications. When executing a carefully planned approach, the manner in which you handle layoffs can help "soften" the overall impact. The WARN Act helps to do just that.
About the Author
Michael Pires is the President of HR411.com, an award-winning online human resources support and information portal providing on-demand access to downloadable forms, online background checking tools, plain-English State and Federal employment laws, Employee Handbooks and much more. Visit http://www.HR411.com today.