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The Worker Adjustment and Retraining Notification (WARN) Act

The Worker Adjustment and Retraining Notification (WARN) Act
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  • 2:27 Covered Events
  • 2:57 Notification Required
  • 6:13 Bumping
  • 7:28 Enforcement
  • 8:23 Lesson Summary
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Lesson Transcript
Instructor: Shawn Grimsley
Massive layoffs and plant closings can dramatically affect the lives of employees. In this lesson, you'll learn about the Worker Adjustment and Retraining Notification Act and how it attempts to alleviate economic fallout.

The Warn Act & Its Purpose

Fred works at a factory building Automobile Parts for Automakers. Unbeknownst to Fred, his employer is currently in the process of negotiating the outsourcing for the manufacturing of the parts to a firm in China. This will mean that Fred will no longer have a job.

Fortunately for Fred, his employer is subject to the Worker Adjustment and Retraining Notification Act (WARN). WARN requires that qualified employers who plan on massive layoffs or closing their plants or factories provide at least 60-days advance notice to affected employees and certain state agencies and affected local communities, such as Fred's hometown.

WARN helps provide some time for employees, local communities and state agencies to prepare for the economic fallout of a large loss of employment. Ironically, even though 'retraining' is part of the Act's title, WARN does not authorize or provide funding for training activities.

Covered Employers & Employees

Not all employers are subject to the act. Private sector employers must have at least 100 full-time employees or 100 or more employees who work at least 4,000 hours per week, not counting overtime. Federal, state, local, and tribal governments are not subject to the Act. However, if a public organization is engaged in a business that functions independent of the government, the act will apply so long as the required minimum number of employees is met. Fortunately for Fred, his employer is covered.

Not all employees are covered under WARN. Generally speaking, employees that are covered under the Act include hourly or salaried employees, including managers and supervisors. However a company's business partners are not covered under the Act. Moreover, contract employees that work for the company through an employment agency are not covered by the Act. Additionally, people who have been told by the company that their employment is only temporary are not entitled to notice under WARN. Workers located at the company's foreign offices and facilities are not covered under WARN. Fortunately for Fred, he's a covered employee.

Covered Events

According to the Congressional Research Service, there are three general types of events that require notification pursuant to WARN. Let's look at each of them briefly.

  • Plant closings resulting in at least 50 employees being terminated
  • Massive layoffs of at least 50 workers where the loss of jobs is at least 33% of the people at the work site
  • Massive layoffs that result in a loss of 500 or more jobs at one site

Notification Required

Employees covered under the act must be provided written notice of the layoff 60 days prior to the layoff or plant closing. If the employees are covered by a collective bargaining agreement, the notification must be sent to the employee's bargaining representative at the union. Additionally, the employer must notify the state agency responsible for carrying out rapid response activities. A rapid response activity is a service provided to displaced workers after a massive layoff or closing. These services may include such things as career counseling, help with finding jobs, education and training services, and unemployment insurance.

Fred and his fellow employees can utilize these services to obtain training for skills in demand, help with finding a new job, and receive state benefits to help make ends meet while looking for new work. Notice must also be sent to the chief elected official of a local government within the community where the layoffs or closing will take place. For example, the mayor of the community would be a chief elected official.

The WARN Act requires certain information to be provided with each written notice. According to the Congressional Research Service, the Act requires '(1) A description of the planned action and a statement as to whether the planned action is expected to be permanent or temporary, (2) The expected date or dates when the layoff will commence, and (3) The name and telephone number of a company official to contact for more information'.

Exception to 60-Day Notice

The WARN Act provides some exceptions to the 60-day notice requirement.

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