Legal Definitions - Worker Adjustment and Retraining Notification Act (WARN)

The Worker Adjustment and Retraining Notification Act (WARN) is a federal law designed to protect employees, their families, and communities by requiring most employers with 100 or more employees to provide advance notice of plant closings and mass layoffs.

Specifically, WARN mandates that covered employers give at least 60 calendar days' written notice before a plant closing or a mass layoff. This notice must be provided to affected employees (or their union representatives), the state dislocated worker unit, and the chief elected official of the local government where the closing or layoff is to occur. The purpose of this advance notice is to give employees time to seek new employment or retraining and to allow local communities to prepare for the economic impact.

WARN applies under specific circumstances:

• Plant Closing: If an employment site (or one or more facilities or operating units within an employment site) is shut down, and this results in an employment loss for 50 or more employees during any 30-day period.
• Mass Layoff: If a layoff occurs that is not the result of a plant closing, but it leads to an employment loss at a single site of employment for either:
  • 500 or more employees during any 30-day period, or
  • 50-499 employees, if these layoffs constitute at least 33% of the employer's active workforce at that site.

To be considered an "affected employee" under WARN, an individual must have worked at least 20 hours per week and for at least six months within the last 12-month period. Employers who fail to comply with WARN requirements may be liable for back pay and benefits to affected employees for each day of violation, and may also face civil penalties.

Examples of WARN Act Application:

• Example 1: Factory Relocation

  A large automotive parts manufacturer, "Global Auto Parts Inc.," employs 300 people at its assembly plant in Michigan. The company decides to close this plant entirely and move all operations to a new facility overseas to reduce costs. This decision will result in the termination of all 300 employees. Under the WARN Act, Global Auto Parts Inc. would be required to provide at least 60 days' advance notice to all affected employees, their union (if applicable), the state's dislocated worker unit, and local government officials. This is because the closure affects more than 50 employees due to a plant closing.

• Example 2: Corporate Restructuring

  "Tech Solutions Corp.," a software development company with 1,200 employees across its main campus, decides to eliminate its entire quality assurance department as part of a corporate restructuring. This department consists of 150 employees. While the company is not closing its entire operation, the layoff of 150 employees represents more than 33% of the company's total workforce (150 is more than 33% of 1,200, which is 400). Therefore, Tech Solutions Corp. would need to issue a 60-day WARN notice to the affected quality assurance employees and relevant government entities.

• Example 3: Large-Scale Departmental Shutdown

  "Mega Retailers Inc." operates a chain of department stores and has a corporate headquarters employing 2,500 people. Due to declining sales, the company decides to shut down its entire e-commerce fulfillment division, which employs 600 individuals at its central warehouse facility. Even though Mega Retailers Inc. is not closing all its stores or its corporate headquarters, the layoff of 600 employees at a single site constitutes a mass layoff exceeding the 500-employee threshold. Consequently, Mega Retailers Inc. must comply with the WARN Act by providing 60 days' notice to these 600 employees and the appropriate government agencies.