Many employers in the travel, hospitality, and other industries affected by COVID-19 are facing the need to immediately reduce their workforces, at least temporarily. We have received multiple questions from clients regarding their obligation to send mass layoff notices as required under the federal Worker Readjustment and Training Notification (WARN) Act.
WARN only applies to businesses with 100 or more employees. For covered companies, notices must be sent 60 days in advance of the layoffs if they affect the greater of 50 employees or one-third of the workforce at any individual worksite. WARN contains an exception to the 60-day advance notice period when the employer demonstrates unforeseeable business circumstances that prevent giving more notice. We believe that the current pandemic qualifies for the exemption, but the notices must still be sent as soon as practicable after the employer learns of the need to reduce the workforce.
WARN defines employment loss in the context of mass layoffs as an action that lasts more than six months. Some companies may conclude that they are confident that they will recall temporarily displaced workers within six months and therefore decide to forgo the notices. Others have decided to send contingent WARN notices, meaning that they explain the employer’s intent to recall workers as soon as possible but cannot predict that actual date.
WARN notices must be sent to the individual affected employees, union representatives (if any), local government officials, and the state displaced worker unit. The notices must include specific information about the layoffs and affected workers. A number of states have “mini-WARN” laws that may impose additional requirements (although some states such as California are temporarily suspending some of their requirements). The U.S. Department of Labor can issue civil penalties for WARN violations, but it may not be inclined to do so given the emergency circumstances. More likely would be private lawsuits claiming pay and benefits for any period of time under which notices should have been provided. As of the present, federal relief legislation does not include any temporary changes to WARN requirements.
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