Update to WARNing to Employers: State and Federal WARN Acts Require Advance Notice of Significant Employment LossesMar 24, 2020
In light of the ongoing COVID-19 pandemic, employers are likely considering the prospect of ordering mass layoffs or plant closings. We recently posted an overview of the federal and state Worker Adjustment and Retraining Notification Acts (“WARN Acts”), which require advance notice to employees of mass layoffs and plant closings. Mass layoffs include terminations, temporary layoffs exceeding 6 months, or the reduction in hours of work of individual employees of more than 50% during each month of any 6–month period.
Generally, for employers with 100 or more employees, the WARN Acts require employers to give employees 60-day advance notice of a reduction of 50 or more employees (federal law) and 25 or more employees (state law) in a 30-day period. If layoffs occur on a rolling basis, the 30-day notice period is extended to 90 days. Employers must also notify specified government offices and appropriate union representatives.
The WARN Acts provide employers with some exceptions to the notice requirements. If an employer qualifies as a “faltering company,” or there is an unforeseen business circumstance or natural disaster that necessitates a mass layoff or plant closing, there may be fact-specific arguments for an employer to give less than 60 days’ notice. These exceptions are narrowly construed, and even if an exception applies, the employer should still give notice “as soon as practicable.” This means that, although an exception may apply, the notice requirement is not waived. Notice, although required to comply with the 60-day rule, still must be given as soon as possible. Layoffs and closings due to the impact of COVID-19 may very well meet one of these exceptions in some cases, but providing advance notice when possible is expressly encouraged under the Act and may reduce penalties even if a violation does occur—penalties are reduced by the number of days the employee had actual advance notice. For example, under normal circumstances, if an employer only gives 50 days’ notice, applicable penalties would only apply to the 10 days before notice was given.
The New Hampshire Department of Business and Economic Affairs (“BEA”) recently tweeted that it is not requiring WARN Act notice, but has not posted any official statement. Future guidance from federal and/or state agencies may shed more light on employers’ obligations under the WARN Acts during the COVID-19 crisis. Keep watching our blog for updates.
About the Authors: Meredith R. Farrell and Kelley L. Stonebraker