Worker Adjustment and Retraining Notification Act
The Worker Adjustment and Retraining Notification (WARN) Act of 1988 is a federal law which protects employees by requiring most employers with 100 or more employees to provide 60 days' advance notification of plant closings and mass layoffs to employees. Mergers and acquisitions may trigger a WARN notice, depending on the number of employees terminated, the state of residence and whether any exceptions apply.
Employees entitled to notice under the WARN Act include managers, supervisors, hourly and salaried workers. The WARN Act requires that notice also be given to employees' representatives, the local chief elected official and the state dislocated worker unit.
In addition to the WARN Act, which is a federal law, many states have enacted similar laws that require notice to employees facing job loss from a mass layoff or plant closing. Notice can be required under state law, even if not required under federal law. Sometimes notice is required under both state and federal law.
Under federal law, an employer who violates the WARN provisions is liable to each employee for an amount equal to back pay and benefits for the period of the violation, up to 60 days, and a civil penalty of $500 per day for each day of violation, payable to the local government. There may be additional state penalties.
For additional information, please contact Max Seltzer, a partner with Luse Gorman Pomerenk & Schick, P.C., who specializes in executive compensation, mergers and acquisitions, mutual-to-stock conversions, stock and non-stock benefit plans, non-qualified deferred compensation plans, employee benefits and taxation.