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Know when workers September 14 , 2007 Excerpted from Arkansas Employment Law Letter, written by attorneys at the law firm Jack Nelson Jones Fink Jiles & Gregory, P.A. Q: I'm in charge of a factory that has been around for more than 20 years. Business has been declining for the last six months, and I'm afraid that we're going to have to lay off some of our employees. What must I do before announcing the layoffs? A: Under the Worker Adjustment and Retraining Notification Act (WARN), employers are required to notify the government of anticipated plant closings and layoffs. WARN was designed to protect workers, their families, and communities by requiring employers to provide notice 60 days before certain plant closings and mass layoffs. The notice must be provided to affected workers or their representatives (e.g., a labor union), to the state's dislocated worker unit, and to the appropriate unit of local government. Who's covered? In general, you're covered by WARN if you have 100 or more employees, not counting people who have worked less than six months in the last year or employees who work fewer than 20 hours a week on average (irregular employees). Private for-profit employers and private nonprofit employers are covered. So are public and quasipublic entities that operate in a commercial context and are separately organized from the regular government. Regular federal, state, and local government employers that provide public services aren't covered. Hourly and salaried workers and managerial and supervisory employees are all entitled to notice under WARN. Business partners aren't. What triggers notice? Plant closing. A covered employer must give notice if an employment site (or one or more facilities or operating units within an employment site) will be shut down and if the shutdown will result in job loss for 50 or more employees during any 30-day period. That doesn't count irregular employees, although they're entitled to notice. Mass layoff. A covered employer must give notice if it's planning a mass layoff that doesn't result from a plant closing but will cause a job loss for 500 or more employees at the work site during any 30-day period or for 50 to 499 employees if they make up at least 33 percent of the employer's active workforce. Again, that doesn't count irregular employees. You also must give notice if the number of job losses for two or more groups of workers, each of which is less than the minimum number needed to trigger notice, reaches the threshold level of either a plant closing or mass layoff during any 90-day period. Job losses within any 90-day period will count together toward WARN threshold levels unless they're caused by separate and distinct actions. Sale of business When a mass layoff or plant closing occurs because part or all of a business has been sold, the following rules apply:
Exemptions You don't have to give notice if a plant closing affects a temporary facility or if the closing or mass layoff occurs because a particular project or undertaking is completed. That exemption applies only if the workers were hired with the understanding that their employment was limited to the duration of the facility, project, or undertaking. You can't label an ongoing project "temporary" to evade your WARN obligations. You don't have to provide notice to strikers or workers who are part of the bargaining units involved in the labor negotiations that led to a lockout when the strike or lockout is equivalent to a plant closing or mass layoff. Nonstriking employees who lose their jobs because of a strike and workers who aren't part of the bargaining units involved in the labor negotiations that led to a lockout are still entitled to notice. Who must receive notice You must give written notice to the chief elected officer of the affected employees' exclusive representative or bargaining agency and to unrepresented individual workers who may reasonably be expected to experience an employment loss. Irregular employees are also entitled to notice even though they aren't counted when determining the trigger levels. In addition, you must provide notice to the state dislocated worker unit and the chief elected official of the unit of local government where the work site is located. Notification period With three exceptions, your notice must be timed to reach the affected parties at least 60 days before a closing or layoff. When job losses occur on more than one day, the notices should be provided to employee representatives, the chief elected official of the unit of local government where the work site is located, and the local government at least 60 days before each closing or mass layoff. If the workers aren't represented, each worker's notice is due at least 60 days before he loses his job. The three exceptions are:
Form and content of notice No particular form is required, but all notices must be specific and in writing. Any reasonable method of delivery designed to ensure receipt 60 days before a closing or layoff is acceptable. Notice may be given conditionally upon the occurrence of an event only when the event is definite and its occurrence will result in a covered employment action in less than 60 days. Penalties An employer that violates WARN by not providing appropriate notice is liable to each affected employee for back pay and benefits for the period of violation, up to 60 days. Liability may be reduced by wages you paid the employee during the period of the violation and by voluntary and unconditional payments made to the employee. An employer that fails to provide required notice to a unit of local government is subject to a maximum $500 penalty for each day of the violation. The penalty may be avoided if you satisfy your liability to each affected employee within three weeks after you order the closing or layoff. Bottom line WARN was designed to provide employees who lose their jobs because of layoffs or plant closures with enough time to make financial arrangements or find other work. The notice requirements are fairly minimal, especially since employers covered by WARN probably already have established ties to the entities that must be notified. Copyright 2007 M. Lee Smith Publishers LLC. This article is an excerpt from ARKANSAS EMPLOYMENT LAW LETTER ARKANSAS EMPLOYMENT LAW LETTER should not be construed as legal advice or a legal opinion on any specific facts or circumstances. The contents are intended for general information purposes only. Anyone needing specific legal advice should consult an attorney. The State Bar of Arkansas does not certify specialists in labor law, and we do not claim certification in any listed area. For further information about the content of any article in this newsletter, please contact any of the editors. ___________________________________________________________________ Additional resources on HRhero.com Subscribers Area Resources (available to Employment Law Letter subscribers)
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