The WARN Act

The news has been consumed with massive tech company layoffs.  Large companies such as Twitter, HP, Cisco, Amazon, and Roku are only a few of the companies that have recently made drastic employee cuts.  While companies prepare for a recession, it is important for employees to know their rights.

Under the Federal Worker Adjustment and Retraining Notification Act (WARN Act), an employer with 100 or more employees, must provide employees with 60-days’ notice in advance of plant closings and mass layoffs.  The term “plant closing” means the permanent or temporary shutdown of a single site of employment or one or more facilities or operating units within a single site of employment.  The term “mass layoff” means a reduction in force which is not the result of a plant closing and results in a loss of at least 33% of active employees within a 30-day timespan or where there are 500 or more employees, a loss of at least 50 employees within a 30-day timespan.  

If employed in New York, employees have additional protections under the New York State Worker Adjustment and Retraining Notification Act (NYSWARN Act).  Under the NYSWARN Act, an employer with 50 or more employees within New York State must give 90-days’ notice prior to the mass layoff, plant closing, relocation, or covered reduction in work hours.

There are three exceptions to the notice requirement under Federal law.  First, a faltering company, (a company that is actively seeking capital that could avoid or postpone the layoff or closure) is not required to give notice if the company reasonably believes that advance notice would hurt its ability to continue operating.  Second, a business is not required to give a full 60-days’ notice if it could not reasonably foresee business circumstances that led to the mass layoff or closing.  Finally, a business is not required to give notice if the layoff or plant closing is the direct result of a natural disaster.

Employees who believe their employer is subjecting them to illegal practices at the workplace should seek legal counsel to analyze their potential claims.