Some Employers are Required by Law to WARN Workers About Layoffs

Did you know that certain business owners considering employee layoffs due to the COVID-19 pandemic (and most other reasons) may be required by law to give the affected workers advance notice? Employers whose businesses meet certain criteria are required by federal law to warn workers about layoffs through the Worker Adjustment and Retraining Notification (WARN) Act.

What is the WARN Act?

The WARN (Worker Adjustment and Retraining Notification) Act of 1988 offers protection to workers, their families, and communities by requiring employers to provide notice at least 60 days in advance of covered business closings and covered mass layoffs, according to the Michigan Department of Career Development.

Scope of coverage

Employers are covered by the WARN Act if they have 100 or more employees, excluding employees who have worked less than six months in the past year, and who work an average of 20 hours per week. Both profit and nonprofit employers are covered, as are those public entities which operate in a commercial context and are separately organized from the regular government.

What prompts a notice?

When a business closes the employer must give notice if an employment site(s) will be shut down and the shutdown results in an employment loss for 50 or more employees. If the business is not shutting down, but the layoffs result in a job loss for 33% of the employer’s active workforce of 50-499 employees, the business is required to provide notice.

Information required in the notice

Employers must provide information about planned layoffs, including if the layoff is temporary or permanent, the expected date the layoff begins, and when the employee will receive a termination letter.

This notice must be provided to either each individual worker who will be affected or to the labor representative where applicable. Written notice must also be provided to the Michigan Workforce Transition Unit.

Shorter notice is permitted

Shorter notice may be permitted by law if:

  • The layoffs are due to unforeseeable business circumstances.
  • The cuts are because of a natural disaster that resulted in the business closing.
  • The business is struggling financially. However, the company is required to prove that it was actively pursuing business or money that would have postponed or avoided closing. This exception applies to plant closings only.

Employers should review the Act

Employers should review the Act and may wish to seek counsel to discuss its provisions, including scope of coverage, penalties, exceptions, and enforcement. The business attorneys at O’Reilly Rancilio are ready to assist business owners who are dealing with legal issues as a result of the COVID-19 pandemic. For information please call 586-726-1000 or visit our website.