COVID-19 economic downturn brings WARN Act back into play

While most of us have been focused on new federal laws (e.g., the Families First Coronavirus Response Act and the Coronavirus Aid, Relief, and Economic Security Act) in recent weeks, employers must not forget certain old laws can be implicated as action is taken to combat a slack in orders or loss of business altogether because of the coronavirus pandemic. One federal law to keep in mind during the downturn is the Worker Adjustment and Retraining Notification Act of 1988 (more popularly known as the WARN Act). Follow its dictates closely if you're cutting employees' work hours significantly, laying off or furloughing workers, or unfortunately closing the business completely.

Does WARN Act apply to you?

If you're an employer with 100 or more employees, chances are you may be covered by the WARN Act. When determining the 100-employee threshold, however, not all of your workers must be counted. You may exclude employees who have worked (1) less than six months in the past 12-month period or (2) on average less than 20 hours a week.

What triggers WARN Act compliance?

A “plant closing” or a “mass layoff”—defined as distinct events by the WARN Act—triggers compliance with the law. In both cases, an “employment loss” suffered by a sufficient number of employees must occur. Here is how the critical phrases are defined: