Labor: Managing a down economy—WARN Act and its progeny

What qualifies as a plant closing or mass layoff under the WARN Act

The Worker Adjustment and Retraining Notification Act (WARN and its state law equivalents (mini-WARN Acts) protect workers by requiring 60 days’ advance notice of plant closings or mass layoffs. WARN Acts call for potential damages which include up to 60 days’ wages and benefits for each employee of the company, plus daily fines of up to $500. When the economy takes a turn for the worse, the WARN Act and mini-WARN Acts tend to get attention, increasing greater potential that a violation of the WARN Act affects the company in a negative way.

Two events must occur before the notice requirements of WARN and/or mini-WARN Acts arise:

Plant Closing Trigger. The WARN Act defines a plant closing as a permanent or temporary shutdown of a single site of employment, or of a facility or operating unit at a single site, that results in employment loss for 50 or more full-time employees. An operating unit refers to an organizationally or operationally distinct product, operation or specific work function within a single site of employment. For example, an IT department may be an operating unit. If a covered employer were to terminate all 55 IT employees and outsource that entire function, a plant closing would likely be triggered.

Mass Layoff Trigger. Mass layoff is defined as any workforce reduction that does not result from a plant closing and creates an employment loss affecting either:

author image

Tom O'Day

Tom O’Day joined the Milwaukee office of Godfrey & Kahn, S.C. in January 2006 as a member of the Labor and Employment Practice Group. Tom’s...

Bio and more articles

Join the Conversation

Advertisement. Closing in 15 seconds.