Volume 7, No.1
Spring 2001

Feature Articles:
The READY Retail Learning Center:
A new way of training students for tomorrow's jobs today

Women Moving Into Non-Traditional Jobs

The Worker Adjustment and Retraining Notification Act (WARN)

Archives

The Worker Adjustment and Retraining Notification Act: WARN
By: Bruce Bernardi

The recent flurry of plant closings and substantial layoffs has generated a renewed interest in the federal Worker Adjustment and Retraining Notification Act (WARN). Employers and workers alike are seeking answers about what this law requires. And no wonder! During the first 6 months of the Workforce Investment Act Program Year 2000 (July 1, 2000 through December 31, 2000), the IDES Rapid Response Unit (RRU) received 65 WARN notices affecting a total of 8,222 workers. The first two months of 2001 have seen 54 more notices affecting 10,906 workers. During January and February 2000, 16 notices affecting 2,047 workers were filed. Along with the increased frequency of WARN notices and the burgeoning number of affected workers, the RRU has experienced a corresponding upswing in the number of WARN-related inquiries.

Here are some of the most commonly asked questions.

Q: What is the WARN Act?

A: The WARN Act is federal legislation that was enacted in August of 1988 and became effective in February of 1989. This Federal law, for the first time, requires that employers provide advance notification of plant closings and mass layoffs. The WARN Act offers protection to workers and their families and communities by requiring employers to provide notice 60 days in advance of covered plant closings and mass layoffs. This notice must be provided in writing to the affected workers or their representatives (e.g., a labor union), the State Dislocated Worker Unit, and the appropriate unit of local government. Generally, all employers with 100 or more full-time employees are required to comply with the requirements of the WARN Act. All full-time hourly and salaried workers are covered.

Q: What situations trigger application of the WARN Act?

A: Sixty days advance notice must generally be given by an employer, when workers experience an employment loss, if the magnitude of the layoffs or closing reach the following three thresholds:

1. There is a plant closing which results in an employment loss for 50 or more full-time workers at a single site of employment,
   
   
2. There is a mass layoff which results in an employment loss for at least one-third of the full-time workforce at one site of employment with a minimum of 50 workers affected. Note: In both of the above cases the plant closing or layoff must have occurred within any 30-day period or within any 90-day period when there are multiple employment losses for two or more groups of workers, where each group is less than 50 workers but when added together equal or exceed 50.
   
   
3. There is a mass layoff involving an employment loss for at least 500 full-time workers:
   a) within any 30-day period or,
   b) within any 90- day period for two or more groups or workers, each of which is less than 500 workers, but when added together equal or exceed 500.

For example, let’s say there is mass layoff of 100 full-time employees at a work site which employs 180 full-time workers. The following scenarios show whether or not an employer is required to give notice:

• 100 employees laid off on Day #1: notice required;
• 65 employees laid off on Day #1 and 35 employees laid off on day #29: notice required;
• 45 employees laid off on Day #1, 4 employees on Day #20 and 15 employees on Day #87: notice required;
• 55 employees laid off on Day #1, but 6 employees are recalled within 6 months and laid off again at the beginning of the 7th month: none required;
• 60 employees laid off on Day #1 (notice required) and 59 employees laid off on Day #31: (none required for the 59 employees).

To trigger these numerical advance notice thresholds in a plant closing, the shutdown does not necessarily require the closing of the an entire work site. Under the WARN Act, it also means the closing of one or more facilities or operating units within a single site.

Q: Which employers are covered?

A: Employers (business enterprises) that have 100 or more full-time employees, or 100 or more employees who work an aggregate of 4,000 hours per week, even if they do not all work full-time, are required to comply with the provisions of the WARN Act. The term business enterprise includes employers who engage in commercial activities, such as service and manufacturing industries, as well as non-profit employers. The only employers who are excluded from this definition are federal, state and local governments and government agencies. However, certain quasi-governmental entities (private enterprises which contract to do work on behalf of the government), which provide such services as education, transportation and health care or that manufacture products exclusively for the government (such as weapons) are covered.

Q: Which workers are covered?

A: In determining whether a plant closing or mass layoff is covered under the WARN Act, only the number of full-time workers are counted toward the threshold. However, all employees affected by a covered plant closing or covered mass layoff, or their union, are entitled to notice. Thus, even if some employees could not be counted toward the threshold (for example, they are part-time), if they experience an employment loss as a result of a covered plant closing or mass layoff, they are still entitled to notice. Also, the WARN Act applies to all employees, both bargaining unit members as well as top level supervisors, in regard to the threshold determinations and in determining who is entitled to notice. In an effort to prevent employers from circumventing the law by spreading layoffs over more than 30 days, WARN provides that multiple but related layoffs over a 90-day period shall be added together to reach the numerical threshold needed to trigger the notification requirement. However, in order to be added together, each of the separate layoff groups over that 90-day period must be less than the minimum number required to meet the threshold. Also, the employer is expected to show that these separate employment losses are the result of separate and distinct actions and are not an attempt to evade the WARN Act.

Q: Who should receive the 60 day notice?

A: The law specifies the following must receive written notice 60 days in advance of a covered plant closing or mass layoff:

1. Each union representing the affected workers or each affected worker, if not represented by a union, including part-time and/or inactive employees plus employees who will likely suffer an employment loss due to bumping rights, to the extent known by the employer;
2. The State Dislocated Worker (Rapid Response) unit, designated under the Workforce Investment Act;
3. The Chief Elected Official of the unit of local government having general corporate and police powers to whom the employer paid the highest taxes in the previous year.

Q: How should a union respond to a WARN notice?

A: Unions should immediately relay information they receive to all affected workers and should consult their international unions and/or their legal counsel to determine further action. It is important to understand that once an employer gives notice to the union, his/her legal obligations have been fully satisfied, and any failure on the part of the union to notify the individual workers is not the responsibility of the employer. Unions should contact their international unions for further information about these programs. Additionally, staff from the AFL-CIO Member Assistance Program and National AFL-CIO Working for America Institute are available to consult with unions interested in programs for union members

End of Part 1 Look for Part 2 in the next issue of the ILMR