No surprises allowed: Understanding the WARN Act

Workforce reductions are never simple, but when they happen suddenly, one federal law immediately comes into focus: the federal Worker Adjustment and Retraining Notification Act (WARN Act).

Designed to ensure employees and communities have time to prepare for significant job losses, the WARN Act requires covered employers to provide 60 days’ notice before certain layoffs or closures. While intended to promote fairness and predictability, WARN compliance is nuanced, and mistakes can lead to substantial liability. This article provides a clear, practical roadmap for employers and attorneys navigating WARN obligations.

Covered employers

The WARN Act applies to employers with 100 or more full-time employees, excluding part-time employees. It also applies to employers with 100 or more employees, including part-time, that collectively work at least 4,000 hours per week, excluding overtime.

When does WARN apply?

Plant closing and mass layoff thresholds. WARN is triggered by a “plant closing” or “mass layoff” at a single employment site. A plant closing is a temporary or permanent shutdown causing employment loss for at least 50 full-time employees in a 30-day period. A mass layoff doesn’t involve a shutdown but results in employment loss for (1) at least 50 full-time employees and at least 33% of the workforce, or (2) 500 or more full-time employees.