Human Resource Blog

Federal WARN Clarified

I’m puzzled. I’ve read that WARN applies to companies that are laying off 50% of their employees. Then, I’ve also read that it applies if a company is laying off 50 people, or 33% of the workforce. Which is it?

Many people are understandably confused about the Worker Adjustment and Retraining Notification Act, also known as WARN.  

WARN protects employees, their families and the community by requiring employers to notify workers 60 days before a large number of people will be laid off.

There are two situations that WARN covers:

• Plant Closings

• Mass Layoffs

A plant closing occurs when a factory, facility or operating unit is shut down for more than 6 months. If 50 or more employees are laid off in a 30 day period, at a single site, that also qualifies as a plant closing, even if the plant or business continues to operate.  

Under WARN, a mass layoff occurs when 33% of the workforce is laid off  for 6 months or more, IF that layoff involves 50 to 499 workers.

A mass layoff also occurs if more than 500 workers are laid off during a 30 to 90 day period. For example, if a company employing 2,500 workers laid off 500 people, that’s 20%. That would qualify as a mass layoff under WARN. However, if the same company laid off 499 people in a 90 day period, that would not qualify as a mass layoff, because it includes a) less than 500 people and b) less than 33% of the workforce. (That situation would be considered a plant closing.)

The purpose of WARN is to give employees time to adjust to the job loss by looking for new jobs, or by training to gain marketable skills.

There are a number of exceptions under WARN. It does not apply to companies who close temporary facilities. It doesn’t apply to workers who were hired to complete a specific short-term project. When the layoffs result from business closure, a natural disaster or unforeseeable business circumstances, WARN allows employers to give less than 60 days notice.

Managers and supervisors are entitled to notification under WARN, as well as hourly employees.

WARN applies to most employers with 100 or more employees. However, any employees who have worked less than 6 of the last 12 months, are not counted in that total. Any employees who average less than 20 hours per week are also not included.  The law excludes federal, state and local governments that provide public services.