Imagine that after fifty years, it looks like your factory will be closing. This means that there will be substantial lay-offs, but you don’t want to hurt morale, so you don’t plan to tell employees until two weeks before their last day of work. Despite your good intentions, you’re probably in violation of the WARN Act.
The WARN Act requires an employer-in-the-know to inform employees within sixty days of a mass layoff. For every day within that time window that the employer fails to warn its employees, that employer owes a day’s wages and benefits to each unwarned employee. So if you give only a month’s warning to a thousand employees, you’ll be liable for thirty thousand days of employee wages, not to mention health insurance and other employee benefits.
The WARN Act is a federal law, and applies to all states. Be aware that New York extends the warning period to 90 days. Massachusetts provides further programs for employees who will be, or have been, subjected to a mass layoff. First, there is the Reemployment Assistance Program for Dislocated Workers. That program could apply to a substantial reduction or closing of a facility with fifty or more employees, and if so, applies within six months of that anticipated reduction. Consequently, employers should contact the proper state authorities when they become aware of the reduction in order to find out whether the Reemployment Assistance Program applies to their facility.
There are numerous exceptions and modifications to the WARN Act and other state programs that might be applicable to your situation. Employers are encouraged to contact an employment attorney to assure that future firm closings, relocations, and mergers are in compliance with governmental requirements.
Photo credit: Microsoft