Layoff - The Worker Adjustment and Retraining Notification Act (WARN Act)

National Summary

The Worker Adjustment and Retraining Notification Act (WARN Act) provides protection to workers, their families, and communities by requiring employers to provide advance notification of plant closings and mass layoffs. Advance notice is designed to provide workers and their families some transition time to adjust to the prospective loss of employment, to seek and obtain alternative jobs and, if necessary, to enter skill training or retraining that will allow these workers to successfully compete in the job market. The Act also provides for notice to state dislocated worker units so that dislocated worker assistance can be promptly provided.

Not all plant closings and layoffs are subject to the Act, and certain thresholds must be met before the Act applies. WARN Act violations can be expensive, as damages and civil penalties can be assessed against employers that violate the Act. There is also a host of issues that employers must consider in connection with layoffs, such as the possibility of discrimination suits, the notice requirements for and the cost of healthcare continuation coverage, and whether to provide outplacement services and/or severance pay. Employers may also want to anticipate rehiring laid-off workers and taking advantage of government training and retraining programs.