WARN Act

In tough times, an employer needs to protect themselves with such an economic downturn. There may be a need for reduction of the workforce or restructuring of the workforce.

The Worker Adjustment and Retraining Notification Act (WARN):The Duty to give notice of mass layoffs or plant closings.

There is both a Federal and a state of Illinois Worker Adjustment and Retraining Notification Act ("WARN"). The Federal Act applies to employers with 100 or more full-time employees and a "mass-layoff" which triggers notice requirements is defined as 50 or more full-time employees are laid off if they constitute 33% of the full-time employees at the site or 500 employees regardless of percentage.

The Illinois WARN Act applies to employers with 75 or more full-time workers and a "mass layoff" is defined as 25 or more full-time employees are laid off if they constitute 33% of the full-time employees or 250 employees regardless of percentage. Some local municipalities may have their own ordinances that require notice that should also be reviewed.

The WARN acts provide that covered employers provide a 60 day written notice in advance of any "plant closing" or "mass layoff" as defined by the relevant statute.

There are four elements within the definition of "plant closing" and "mass layoff" that trigger the notice requirement.

(1) "employment losses"

(2) the minimum number of employees are affected i.e. 50- 33% or 25-33%

(3) the event occurs over the relevant time period (initially you look at a rolling 30 day period however aggregation clause looks at 90 days)

(4) event occurs at or within a "single site of employment"

3 types of "employment loss" that trigger notice:

1. an employment termination, other than a discharge for cause, voluntary departure, or retirement;

2. a layoff exceeding 6 months; or

3. a reduction in hours of work of more than 50 percent during each month of any 6-month period; 29US210(a)(6) and 820 ILCS 65/5(b)(3). In determining whether hours have been reduced you would need to look at all affected employees. You would however only count an employee once. You would not count a reduction in hours and a termination for other than cause as two instances if it involved the same employee.

Aggregation Clause

You may have to look at terminated employees and current employees when determining if the aggregation clause applies. Although the statute focuses on a 30-day period for calculation threshold levels of loss the aggregation clause of the statute provides that layoffs at a single site of employment during any 90-day period affecting two or more groups of employees that individually do not meet the threshold levels of employment loss will trigger WARN notice requirements if they meet the threshold levels of employment when combined.

What the notice must contain:

• The name and address of the employment site(s) where the plant closing or mass layoff will occur;

• Whether the planned action is expected to be permanent or temporary and if the entire plant is to be closed, a statement to that effect;

• The expected date of the first separation, and the anticipated schedule for making separations;

• The job titles of positions to be affected, and the number of affected employees in each job classification; (for multiple sites, list per site)

• A statement as to the existence of any applicable bumping rights;

• The name of each union representing affected employees, and the name and address of the chief elected officer of each union, if none please state; and,

• The name and telephone number of a company official to contact for further information.

(Also include the employer's federal identification number, or FEIN, for the dislocating company on WARN correspondence to the relevant state agencies)

Who gets Notice:

Notice must be given to the "affected employees", union representatives, various state and local governing bodies and the State Dislocated Worker Unit.

Both the Federal and Illinois Act provide notice to an employee's last known address or inclusion in the employee's paycheck to be considered acceptable methods of giving notice. In addition, the Code of Federal Regulations provide that personal delivery with optional signed receipt is acceptable.

In addition to the municipal and county officials who are required to get notice, you are required to provide notice to the Illinois Department of Commerce & Economic Development. They in turn will contact the employer and conduct on-site meetings and pre-layoff workshops for the employees. They will also post a report on their website which identifies the notice. You can find additional information about WARN on their website which can be found at: http://www.commerce.state.il.us/dceo/Bureaus/Workforce_Development/WARN/

Exclusions, Exemptions and Exceptions from Notice Requirements

There are several situations where the obligations under WARN are exempt or reduced. The exceptions however, are limited and fact specific. Some of these include the sale of a business, relocation and transfer of employees, temporary projects, strike or lockout exemptions. Exceptions to a full 60 day notice include faltering company, unforeseen business circumstance and natural disaster.

Failure to provide notice:

An employer that fails to provide notice as required by law is liable to each affected employee for back pay and benefits for the period of the violation, up to a maximum of 60 days. The employer may also be subject to a civil penalty of up to $500 for each day of the notice violation. This law does not apply to federal, state, or local governments.