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Thinking of Closing Your Plant Read This First

An Overview of the WARN Act.

October 18, 1999
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The Worker Adjustment and Retraining Notification Act (WARN) places notice requirements on certain employers prior to ordering a plant closing or mass layoff. Generally, it prohibits a covered employer from ordering a plant closing or mass layoff before the end of a 60-day period that begins when written notice is provided to employees telling of the plant closing or layoff.

Are you a covered "employer?"
WARN defines "employer" as an enterprise that meets either part of the following two-part definition. First, an 'employer' is any business enterprise that employs 100 or more employees, excluding part-time employees. An 'employer' also includes a business enterprise that employs 100 or more employees, including part-time employees, who, in the aggregate, work at least 4,000 hours per week exclusive of overtime.

What is a plant closing?
A plant closing occurs when a single employment site is shut down permanently or temporarily, causing an employment loss for 50 or more full-time employees within a 30-day period.

What is a mass layoff?
A mass layoff occurs when a single site suffers an employment loss which affects at least 33 percent of the site’s full-time workforce and at least 50 full-time employees at that site during any 30-day period. Regardless of percentages, if 500 or more employees are laid off within a 30-day period at one site, that will be a mass layoff. The same figures reached within a 90-day period—as a result of separate layoffs—may also trigger the notice requirement, unless the company can show the layoffs were the result of separate and distinct actions.

Who must you notify?
Employers may not implement a plant closing or mass layoff until 60 days after providing written notice to each employee of the closing or layoff. Rather than notify every affected employee, an employer may serve notice to each "employee representative" (within the meaning of the National Labor Relations Act or the Railway Labor Act).

State-dislocated worker units must also be given notice of the closing or layoff. The chief elected official of the unit of local government within which the closing or layoff is to occur must also be notified. Where there is more than one unit of local government, an employer must notify the chief elected official representing the local governmental unit to which the employer paid the highest taxes in the preceding year.

Are there any exceptions?
Specifically exempted from WARN are closings of temporary facilities as well as closings or layoffs that result from the completion of a particular project or undertaking. However, this exemption applies only when the affected employees were hired with the understanding that their employment was limited to the duration of the facility, project or undertaking, however.

The Act also excludes a closing or layoff that constitutes a strike layoff provided that such actions are not attempts to evade the requirements of the law. An employer has no duty to serve the required notice when permanently replacing a person who is deemed to be an economic striker under the NLRA.

Source: CCH Incorporated is a leading provider of information and software for human resources, legal, accounting, health care and small business professionals. CCH offers human resource management, payroll, employment, benefits, and worker safety products and publications in print, CD, online and via the Internet. For more information and other updates on the latest HR news, check our Web site at http://hr.cch.com.

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion.

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