A deadline requiring notice to employees furloughed longer than six months under the federal Worker Adjustment and Retraining Notification Act (the “WARN Act”) may be quickly approaching for employers who laid off or furloughed employees around mid-March 2020 due to the coronavirus pandemic.
The WARN Act generally requires employers with 100 or more employees to provide affected employees with 60 days’ notice of plant closings and mass layoffs. A “plant closing” is defined as a temporary or permanent shutdown of a single site of employment if the shutdown results in an employment loss for 50 or more full-time employees. A “mass layoff” is defined as an employment loss at a single site of employment for either (1) 500 or more full-time employees; or (2) 50-499 full-time employees, provided the affected employees constitute at least 33% of the employer’s active full-time workforce at the single site of employment.
Relevantly, the WARN Act defines “employment loss” as any layoff, other than discharge for cause, exceeding six months or a reduction in hours of more than 50% during each month of any six-month period. Therefore, an employer’s pandemic-related layoffs may become a mass layoff that triggers the notice provisions under the WARN Act.
Penalties for failure to issue the proper WARN Act notice to an affected employee are stiff. Affected employees may seek wages for the period beginning from when the WARN Act notice should have been issued to when the notice was actually issued, for up to 60 days of pay; civil penalties; and reasonable attorneys’ fees.
Although preparing and issuing WARN Act notices can be burdensome, it is usually less expensive than the alternative. Please contact your employment and labor attorneys at Shulman Rogers for further guidance under the WARN Act and/or applicable state laws.
Note: This year, Maryland enacted its own WARN Act requiring certain notifications under similar circumstances to the federal WARN Act. However, the State has announced that it will not fully implement and enforce the state WARN Act until April 2021.
Meredith S. Campbell Chair, Employment and Labor Group
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