Mass Layoffs: What is the WARN Act and how does it protect employees?
Dec 09, 2022
Employers often conduct layoffs, or "reductions in force," to maximize the efficiency of their operations. For example, the organization might be under financial stress or seeking to reduce redundancy. The unfortunate effect is that a large number of workers may find themselves jobless through no fault of their own. The Worker Adjustment and Retraining Notification Act (“WARN Act”) requires certain employers planning for mass layoffs to notify laid off employees in advance, protecting them from sudden loss of income and providing them sufficient time to transition to new employment.
In November 2022, Twitter laid off thousands of employees just weeks after its new owner, Elon Musk, bought the company. Some employees were notified that they were terminated effective immediately and others were simply locked out of company resources with no communication at all. Some of those employees filed a class action lawsuit alleging that Twitter violated the WARN Act. There is another class action pending against Tesla, another Musk-led company, alleging similar violations related to a layoff conducted earlier this year.
What are the WARN Act's notice requirements?
In general, the WARN Act requires employers to provide at least 60 days written notice to employees affected by mass layoffs or their representatives. Your employer also has the option to pay you instead of providing this notice. In other words, your employer could opt to lay you off effective immediately but continue to pay your wages for 60 days. Your employer must also notify state and local government entities.
Is my layoff covered by the WARN Act?
The WARN Act has many nuances. Whether your employer violated the Act depends on a number of factors:
- The WARN Act only applies to mass layoffs. A mass layoff is defined as a layoff of 500 or more full-time employees at a single worksite. A layoff of 50 or more employees at a single site can also be a mass layoff, as long as those 50 make up 33% or more of the total number of employees at the layoff site. For example, if there are 300 full-time employees at your worksite and your employer terminates 100 of them, your employer has conducted a mass layoff. A mass furlough, or temporary layoff, may also qualify. There are also specific rules that apply when your worksite closes and your employer offers to transfer you to a different worksite. A mass layoff does not include situations where employees always understood their employment would be temporary, or in case of certain worker strikes or lockouts.
- The WARN Act only applies to certain employers. Even if your employer conducted a mass layoff, there are exceptions. The Act only applies to employers with 100 or more full-time employees, or 100 or more employees (including part-time employees) who work at least 4,000 hours per week in the aggregate.
- The 60-day notice period may be reduced under certain circumstances. A full 60 days' notice may not be required if your layoff resulted from a natural disaster, unforeseeable business circumstances, or if the notice would have interfered with your employer's ability to seek capital or business which could have prevented or delayed the layoff. Still, your employer must notify you as soon as it can, and must tell you why the notice was delayed.
I think my employer violated the WARN Act. What are my rights?
If you were laid off in violation of the WARN Act, you may be entitled to back pay and benefits for each day of the violation up to 60 days. Your employer may also be required to pay a civil penalty.
What else do I need to know?
Even if your employer did not violate the WARN Act when it laid you off, it may have violated other laws that protect employees. For example, the law may protect you if your employer conducted the layoff in a discriminatory manner, such as laying off a disproportionate number of older workers.
Contact Our Minnesota Employment Attorneys
Baillon Thome Jozwiak & Wanta LLP is committed to protecting the rights of all Minnesota employees. If you have questions about your employment rights, please contact our lawyers for a free initial consultation.