Legal analyst outlines the differences between federal and state standards related to several WARN Act obligations
What: Wolters Kluwer Legal & Regulatory U.S. labor and employment law analyst has provided guidance on the federal Worker Adjustment Retraining Notification (WARN) Act, outlining federal and state differences around coverage, notice, severance, and penalties.
Why: Wolters Kluwer legal expert has provided an analysis on the WARN Act, a measure which requires employers with 100 or more full-time workers to provide written notice at least 60 days before implementing a plant closing or mass layoff, unless the layoff is a direct result of a natural disaster or unforeseeable business circumstances. The analysis found that the combination of COVID and differing federal and state obligations complicate the process employers must follow in warning of mass layoffs. On June 15, a federal appellate court ruled that the COVID-19 pandemic is not a natural disaster that would relieve employers of their duty to give adequate warning before mass layoffs. Although the WARN Act pertains to these larger employers, several jurisdictions have plant closing and layoff requirements that apply to employers with fewer than 100 employees. Some jurisdictions also have stricter notice requirements, with an obligation to provide notice immediately.
Key takeaways from the analysis of the WARN Act include:
- Coverage. The WARN Act applies to public and private employers with at least 100 employees. However, several jurisdictions have plant closing and layoff requirements that apply to public and/or private employers with fewer than 100 employees, including California, Connecticut, the District of Columbia, Hawaii, Illinois, Iowa, Maryland, Massachusetts, New York, Tennessee, and Wisconsin. Requirements can be varied and nuanced: for example, Connecticut has mandates that apply to call centers with at least 50 employees; the District of Columbia has provisions affecting contractors with 25 or more employees; and Iowa’s WARN requirements apply to employers with at least 25 full-time employees.
- Notice. Similarly, some jurisdictions have stricter notice requirements than the 60 days in advance of the specified event that is mandated under the federal WARN Act, either generally, or in particular circumstances. Examples include Alabama, Connecticut, the District of Columbia, Illinois, Iowa, Minnesota, Nevada, New Jersey, New York, Ohio, and Vermont. In some cases, notice must be given as quickly as immediately, within a reasonable time, or as early as possible. Some jurisdictions have notice requirements that are specific to call centers and/or COVID-related events.
- Severance. Although the federal WARN Act does not include a severance pay requirement, some states do have provisions related to severance, or continuation of income and/or health insurance benefits, including Connecticut, Hawaii, Maine, Massachusetts, New Jersey, and Vermont. For example, in Maine and New Jersey, employers may be required to pay severance of one week’s pay for every year of employment. However, in Vermont, severance is not required except as a penalty for violations of that state’s notice requirement.
- Penalties. Under the federal WARN Act, violators may be liable, among other things, for back pay for each day of violation, and benefits, including medical expenses incurred, for up to 60 days, but not more than half the days the employee was employed. Some states with plant closing and layoff laws have similar liability provisions. Several jurisdictions impose civil penalties that can be as high as $10,000 per day for each day of particular types of violations. Employers in at least two states may be subject to criminal liability. In some cases, employees have the right to bring court actions, even class suits, for specified violations, with the right to recover lost wages, benefits, costs, and attorneys’ fees.
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Who: Pamela Wolf, J.D., Senior Labor & Employment Legal Analyst at Wolters Kluwer Legal & Regulatory U.S.
“Given that 24 states, the District of Columbia, and Puerto Rico have laws that may impose various and nuanced requirements in the event of a public and/or private plant closure or relocation, layoff, or reduction in force, it is imperative that employers understand both federal WARN Act requirements and state law provisions that apply in locations where they do business. Some jurisdictions also have requirements triggered by COVID-19-related events.” – Pamela Wolf, J.D.
Contact: For members of the media interested in additional details on the WARN Act’s obligations per state or an interview with legal expert Pamela Wolf, J.D. from Wolters Kluwer Legal & Regulatory U.S., please contact [email protected].
