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WARN Advisor

Background on WARN

In our dynamic economy, many companies are streamlining their operations to maintain a competitive position in the marketplace. Although such actions can help a company to become more efficient, one of the harsh realities is that they often result in the elimination of existing jobs and facilities. The ability of workers to readjust after they have lost their jobs is a concern of the U.S. Department of Labor (DOL). DOL is focusing its efforts on helping workers to find new jobs or to access training opportunities to prepare for new jobs.

WARN's Purpose. For many workers who have been dislocated due to a layoff or plant closure, early intervention can play an important role in their successful re-employment. This helps workers and communities adjust to the effects of layoffs and plant closings. In August 1988, Congress passed the Worker Adjustment and Retraining Notification Act (WARN) to provide workers with sufficient time to seek other employment or retraining opportunities before closing their jobs. This law became effective on February 4, 1989.

DOL's Role. WARN provides that workers who are laid off or terminated in certain circumstances must receive 60 days advance written notice of their job losses. Congress authorized DOL to write regulations necessary to implement WARN. Congress did not, however, give the Department any role in enforcing WARN. WARN is enforced by private lawsuits in the Federal courts. Because DOL has no role in enforcing WARN, it does not issue formal interpretations of the law or the regulations. Instead, DOL tries to provide advice to members of the public who want to know about WARN. The advice given represents DOL's best judgment about what WARN means, but it is not binding in the courts. Users of the WARN Advisor should keep this limitation in mind.

Rapid Response. One of the important purposes of giving advance notice of a plant closing or a mass layoff is that it gives workers time to prepare for the transition between the jobs they hold and new jobs. This transition may involve obtaining information about where new jobs can be found or obtaining training to get new jobs. States and local areas receive funding from DOL to provide dislocated workers with these kinds of services. States also provide Rapid Response services when significant layoffs or plant closings occur to help workers get needed services as quickly as possible and to help employers manage the process of laying off their workers. Although there are many situations in which WARN may not apply, DOL urges employers to give their workers notice even when WARN does not require it and to work with state and local agencies to help their workers get the transition services they need.

A Note of Caution

If an employer is required to give 60 days WARN notice, the employer must do some advance planning to be sure that its workers receive the notice on time. The employer must determine as best it can which employees are going to be affected by the plant closing or mass layoff and how to give them notice. The employer also must prepare and deliver the notice. Thus, the determination of whether and when to give WARN notice must be made in advance of the 60-day notice period, an estimated 65 - 70 days in advance at least.

DOL often gets hypothetical questions about WARN coverage. An example of such a question would be: "If I'm an employer and I'm going to close a plant and lay off 55 workers, but I offer six of them early retirement, is the closure covered?" The answer is if the six workers take early retirement, the plant closing would not be covered since only 49 workers would suffer an employment loss. But the question may assume too much. If the employer knows for certain 65 - 70 days in advance of the closing that the six workers will accept the offer of early retirement, then it is reasonable to not give WARN notice. But, if the employer is just planning on making the offer and doesn't know for certain that all the workers will accept, the employer may be well advised to give WARN notice. If the employer is not certain that they all will accept the early retirement offer and just one of the workers does not accept, the employer may be liable for up to 60 days back pay and benefits to 50 workers, since the refusal of that one worker to accept the offer means that the plant closing is a covered event. For this reason, employers should exercise great care and should act on the facts that are known when they have to decide whether or not to give WARN notice.

This WARN Act advisor is intended to highlight the principal provisions of the Act. It does not replace the advice of counsel. It is not an official statement of interpretation of the Act or of the regulations adopted by the Employment and Training Administration of the U.S. Department of Labor. The regulations appear at 20 CFR Part 639.