The Federal Worker Adjustment and Retraining Notification Act (the “WARN Act”) requires certain employers to provide a minimum of 60 days prior written notice to their employees and certain federal and state agencies of an impending mass layoff or plant closure. The WARN Act is intended to afford employees a reasonable opportunity to find alternative employment in the event that a large number of workers are laid off in the same industry and in the same community at one time.

The WARN Act applies to employers with either (a) 100 or more employees, excluding part-time employees, or (b) 100 or more employees, including part-time employees, if the employees collectively work at least 4,000 hours each week excluding overtime. (29 U.S.C. § 2101(a)(1)). While it may seem like an extraneous obligation applicable only to large companies, the impact reaches much further. Even having one manufacturing facility can implicate your obligations under the WARN Act, whether you know it or not.

A plant closing is a permanent or temporary shutdown of a single site of employment, or one or more facilities or operating units within a single site of employment, if the shutdown results in an employment loss at the single site of employment during any 30-day period for 50 or more employees, excluding any part-time employees. (29 U.S.C. § 2101(a)(2)).

A mass layoff is a reduction in force that is not caused by a plant closing and results in an employment loss at a single site of employment during any 30-day period for either at least (a) 50 employees who comprise at least 33% of active employees or (b) 500 employees. (29 U.S.C. § 2101(a)(3)).

Both plant closures and mass layoffs must occur at a single location. This means that if a company is headquartered in Houston but has remote employees nationwide, the WARN Act would likely not apply. However, if employees are based in one location but dispatched elsewhere (for example, people who may travel for construction or other jobs that require offsite work), those employees would likely be protected by the WARN Act.

Subject to certain exclusions, if either of the plant closure or mass layoff definitions are met as provided above, the WARN ACT requires employers to give notice not only to the affected employees but potentially to the union representative of each affected employee (if applicable), the state dislocated worker unit or office, the chief elected official of the unit of local government where the layoff or plant closing will occur and the federal government, if foreign nationals working on certain visas are laid off. (29 U.S.C. § 2102(a); 20 C.F.R. § 639.6).

Violation of the WARN Act’s notice requirements comes with hefty penalties, including an employer’s obligation to provide back pay for each day of the violation, benefits under an employee benefit plan, including the cost of medical expenses incurred during the employment loss that would have been covered if the closure or layoff had not occurred, and attorneys’ fees should any employee be forced to litigate their rights under the WARN Act.

RR&A’s Corporate Team understands the risk our clients are susceptible to under the WARN Act, especially in times of low commodity prices and unpredictability.  If you believe that your company may be subject to the WARN Act now or in the future, RR&A can provide you with a clear roadmap to ensure you are taking the correct path in complying with all requirements of the WARN Act. Contact RR&A now!