Nonprofits around the globe laid off and furloughed employees en masse throughout spring and summer of 2020 in a desperate attempt to survive pandemic-fueled forced closures and avoid total shutdowns.
In the first few months of the pandemic, employers and employees hoped that layoffs would be temporary — and many assumed that operations would be “back to usual” by the winter.
But now it’s November, the nonprofit workforce remains down by 7.6 percent since March, and nonprofit employers who laid off employees in the summer are facing a federal deadline to report mass job losses that have surpassed the 6 months.
What is the WARN Act?
The federal Worker Adjustment and Retraining Notification (WARN) Act helps ensure that employees have advanced notice prior to mass layoffs and closings. It was created in 1988 as a measure to provide employees with sufficient time and resources to transition to new jobs by requiring employers to give a 60-day advance notice to employees in the event of a “mass layoff.”
The WARN Act applies to private for-profit businesses, nonprofit organizations, and quasi-public entities.
After a WARN Act notice is given, assistance can be provided to laid off workers through each state’s Rapid Response Dislocated Worker Unit. Services provided can include:
- Labor market information
- Job search and placement assistance
- On-the-job training
- Classroom training
- Entrepreneurial training
- Referral to basic and remedial education
Temporary layoffs often don’t meet WARN Act requirements — but large layoffs that surpass 6 months or become permanent as seen throughout the pandemic count as employment loss under the act’s reporting requirements.
What employers does the WARN Act apply to?
The WARN Act applies to employers with 100 or more full time employees or employers with 100 or more full and part-time employees who work an aggregate of at least 4,000 hours per week.
What types of employees are protected by WARN?
- Employees who are terminated or laid off for more than 6 months or who have their hours reduced 50% or more in any 6-month period as a result of the plant closing or mass layoff.
- Employees who may be expected to experience an employment loss as a result of a proposed plant closing or mass layoff.
- Workers who are on temporary layoff but have a reasonable expectation of recall — this includes workers on workers’ compensation, medical, maternity, or other leave.
- Part-time workers (Part time workers are entitled to receive WARN notice, but they do not count when determining whether a company’s closing or layoff falls within WARN requirements.)
What types of events trigger the WARN Act?
A “mass layoff” is a specific definition under the WARN Act, applying to situations where an employer:
- Closes a facility or operating unit permanently or temporarily affecting at least 50 full-time employees.
- Lays off 500 or more workers at a single site of employment during a 30-day period.
- Lays off 50-499 workers constituting 33% of employer’s total active workforce
- Reduces the hours of work for 50 or more workers by 50% or more for each month in any 6-month period
- Announces a temporary layoff of less than 6 months that meets above criteria
What does six months have to do with it?
“Employment loss” under the WARN act is defined as a layoff exceeding six months or a reduction of hours of more than 50% during each month of any six month period.
That means that some employers who laid off employees in mid-May due to the pandemic are now approaching the six month deadline and must provide affected employees with the WARN act notice.
Are there any exceptions?
The Federal WARN Act has several exceptions to the 60-day notice.
Most relevant to the COVID-19 pandemic is an exception for “unforeseen business circumstances” which accounts for plant closings and layoffs due to “sudden, dramatic, unexpected action or condition outside the employer’s control.” In these circumstances, the WARN Act requires employers to provide “as much notice to their employees as practicable.”
The Department of Labor (DOL) confirmed that temporary layoffs or furloughs that were initially expected to last six months or fewer, but later is extended beyond 6 months, may violate the Act unless:
- The extension is due to business circumstances (including unforeseeable changes in price or cost) not reasonably foreseeable at the time of the initial layoff; and
- Notice is given when it becomes reasonably foreseeable that the extension is required
What happens if employers don’t comply?
Failing to comply with federal or state WARN Act laws can be expensive. Employers can be held liable for back pay and benefits for each day the law was violated, up to 60 days.
Don’t forget about state “mini WARN” laws
It’s important to keep in mind that 9 states (New York, New Jersey, California, Illinois, Iowa, New Hampshire, Tennessee, Vermont, and Wisconsin) have “mini” WARN laws that can apply to businesses with less than 100 people and require varying notice periods — from 30 days in Iowa and Vermont to 90 days in New York. Employers in these states should ensure that they are in compliance with both federal and state notice requirements.
Sample WARN Notice
For a copy of a sample WARN notice, click here.
ABOUT THE AUTHOR
Lia Tabackman is a freelance journalist, copywriter, and social media strategist based in Richmond, Virginia. Her writing has appeared in the Washington Post, CBS 6 News, the Los Angeles Times, and Arlington Magazine, among others.