WARN Act Allows Three Exceptions

By Adrienne Fox Jun 1, 2009
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June CoverThe Worker Adjustment and Retraining Notification (WARN) Act offers protection to workers, their families and communities by requiring employers to provide 60 days’ notice in advance of covered plant closings and covered mass layoffs, according to the U.S. Department of Labor.

“The WARN Act covers wages, salaries, commission, sick pay, all compensation, if it is earned 180 days before the bankruptcy filing” or other closing, says Lee Woodard, managing partner of the Syracuse, N.Y., office of Harris Beach.

“There is a $10,950 ceiling on the amount paid each employee.”

The WARN Act allows for three exceptions to 60-day notice with the burden of proof on the employer:

Faltering company. This exception, to be narrowly construed, covers situations where a company has sought new capital or business to stay open and where giving notice would ruin the opportunity to get the new capital or business, and applies only to plant closings.

Unforeseeable business circumstances. This exception applies to closings and layoffs that are caused by business circumstances that were not reasonably foreseeable at the time notice would otherwise have been required.

Natural disaster. This applies where a closing or layoff is the direct result of a natural disaster, such as a flood, earthquake, drought or storm.

When the notices are given under these exceptions, they must include a brief statement of the reason for reducing the notice period in addition to the items required in notices.

An employer who violates the WARN provisions is liable to each aggrieved employee for an amount including back pay and benefits for the period of violation, up to 60 days.

California, Illinois, New Jersey and New York have versions of the WARN Act; they may differ from the federal WARN Act.

For more information, see the WARN fact sheet at www.doleta.gov/programs/factsht/warn.htm.

The author is a contributing editor and former managing editor of HR Magazine.

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