The Worker Adjustment and Retraining Notification Act (WARN) is an important labor law that provides protection to employees through requiring companies to give advanced notice of planned lay-offs or facility closures. Below we explain why the WARN Act is important and how it protects workers.
What is the WARN Act?
In a nutshell, this act protects workers, their families and communities by requiring companies to provide written notice of pending closures or mass layoffs. Without proper notice, employees and their families would experience extreme financial hardships. Companies that have more than 100 employees are required to inform employees. Almost all forms of employees are covered, such as private, for-profit and non-profit. However, local, state and federal employees are not covered.
Which Situations Invoke the WARN Act?
Under this act, there are three main situations that require the company to provide official notice to their employers.
First, plant closures that will result in over 50 employees being laid off require official notice to be given to employees during a 30-day period. Even new employees who have worked less than six months or part-time employees who work fewer than 20 hours a week, must receive notification.
Second, temporary mass layoffs warrant official notification from the company. In this situation, the plant will not close, but temporarily halt production. A mass layoff means that over 500 employees are laid off during a 30-day period. However, plants with between 50 to 499 employees must notify laid off employees if the aggregate amount is at least 33 percent of the total workforce.
Third, when a business is sold, the company must similarly provide written notice of the planned plant closure or mass layoff.
Why Employment Loss Happens
Employment losses come in the forms of work hour reductions, temporary layoffs and plant closures. Many industry-based companies are forced to take these actions in order to remain financially competitive. That is, certain industries are seasonal or demand-based. For example, lumber sawmills typically shut down during winter seasons or periods of low customer demand. Freezing weather makes lumber production very difficult because of frozen logs and equipment. On the other hand, the spring and summer seasons are peak production opportunities for sawmills because this is when homeowners renovate or companies build new homes. During autumn and winter, the housing market slows down and production demand can come to a halt. Therefore, certain industries must temporarily lay off employees or temporarily close their facility in order to avoid bankruptcy.
Who Helps Dislocated Workers?
The Department of Labor in every state has their own workforce affairs or development program. Some of these programs fall under the state’s Employment Department. The goal of these programs is to provide support services and ensure a rapid response to meet the needs of dislocated workers. These programs typically offer free employee training and development services and programs. They also provide career counseling, resume preparation, interview workshops and job search assistance.
In short, this important employment law protects workers and their families through informing them of pending plant closures or temporary mass layoffs. This allows employees to financially prepare and take care of their families. The Worker Adjustment and Retraining Notification Act (WARN) is a critical piece of legislature that helps keep workers employed and financially stable.