Legal Definitions - plant closing

The term "plant closing" refers to a specific type of significant workplace shutdown as defined by the Worker Adjustment and Retraining Notification (WARN) Act. The WARN Act is a federal law that requires certain employers to provide advance notice of significant layoffs and plant closings.

Under the WARN Act, a plant closing occurs when an employer permanently or temporarily shuts down an entire employment site, or one or more distinct facilities or operating units within a larger site. This shutdown must result in either:

• The loss of jobs for at least 50 full-time employees, OR
• A reduction of more than 50% in work hours for at least 50 full-time employees.

Part-time employees are not included when calculating these thresholds. If a situation meets this definition, the employer is generally required to provide affected workers with at least 60 days' advance written notice.

Here are some examples to illustrate what constitutes a plant closing under the WARN Act:

• Example 1: Complete Factory Shutdown
  A large manufacturing company operates a single factory that produces specialized industrial components. Due to a shift in market demand, the company decides to permanently cease all operations at this factory. The factory employs 150 full-time production workers, all of whom will lose their jobs. This scenario qualifies as a plant closing because the entire employment site is shutting down, resulting in job loss for more than 50 full-time employees.
• Example 2: Closure of a Specific Department within a Larger Campus
  A major technology firm has a large corporate campus with several distinct research and development divisions. The company decides to permanently close its "Advanced Robotics Division," which occupies an entire building on the campus and functions as a self-contained operating unit. This closure will result in the layoff of 80 full-time engineers and support staff from that division. Even though other divisions on the campus remain operational, the shutdown of a distinct operating unit affecting more than 50 full-time employees constitutes a plant closing.
• Example 3: Temporary Shutdown with Significant Hour Reductions
  A large food processing plant, employing 200 full-time workers, experiences a severe but temporary disruption in its supply chain. To manage inventory and costs, the company announces a temporary shutdown of its main processing line for four months. During this period, all 200 full-time employees will have their work hours reduced by 70%. This situation meets the definition of a plant closing because it involves a temporary shutdown of an operating unit (the main processing line) resulting in a reduction of more than 50% of work hours for at least 50 full-time employees.