What is the WARN Act and How Does It Work?

Some workers who work at covered businesses are protected under the Worker Adjustment and Retraining Notification Act. This act requires covered employers to provide notice to their employees in advance of a mass layoff, sale of the business or planned closing due to financial hardship. Swartz Swidler is available to explain your rights if your company is undergoing one of these events.

What is the Warn Act?

Enacted in 1989, the Warn Act is meant to protect employees and communities by requiring covered employers to provide at least 60 days advance notice of a planned mass layoff, business sale or planned closing. The purpose of the act is to give the workers time to find new employment so that they might avoid financial issues caused by suddenly losing their jobs.

Who is covered under the Warn Act?

The Warn Act covers employers that have 100 or more workers. This number does not count workers who work fewer than 20 hours per week or those who have worked for fewer than six months out of the past 12. The law applies to the following employers:

  • Private companies, including nonprofits and for-profits
  • Public entities that are commercial in nature and separate from the rest of the government
  • Quasi-public entities that are commercial in nature and that are separate from the government

The law does not apply to local, state and federal governmental entities that offer public services. Both hourly and salaried workers at covered employers are protected by the Warn Act. Supervisory and managerial workers are also covered, but business partners are not.

Exceptions to the Warn Act

There are several exceptions to the Warn Act. No notice is required if a temporary plant is being closed. Notice is also not required if the mass layoff or closing will occur because a project has ended. This exception applies only when the workers were informed at the time of being hired that their employment would be limited to the duration of the project or the temporary facility. Employers are not allowed to call ongoing projects temporary to try to skirt their Warn Act responsibilities.

Strikers and bargaining unit members who are involved in negotiations leading to a lockout are not entitled to Warn Act notices if the lockout or strike is similar to a mass layoff or closing. Employees who don’t strike and who lose their employment as an indirect or direct result of a strike are entitled to notice. Employers are not required to give a 60-day notice to permanently replace an economic striker.

Penalties for Warn Act violations

When employers violate the Warn Act by not providing the required notice, they are liable to all of the harmed employees who lose their jobs to pay back pay and benefits for the violation period up to 60 days.

Public and quasi-public entities who don’t provide the required notice face civil penalties of up to $500 per day for the violation period. These entities may avoid the penalty as long as they pay the back pay and benefits amounts to all of the aggrieved employees within three weeks of the layoff or closing.

If you worked for an employer that you believe is covered by the Warn Act and you lost your job without notice in a mass layoff or closing, you may need legal help. Contact Swartz Swidler today to learn about the remedies that might be available to you.