In recent weeks, we have fielded a growing number of questions from employers contemplating layoffs due to economic uncertainty surrounding their businesses. Companies considering restructuring their workforce should take into consideration legal requirements imposed by the federal Worker Adjustment and Retraining Notification Act (WARN). WARN requires covered companies to provide 60 days' advance notice of a mass layoff or plant closing. WARN is usually triggered when such layoffs affect the greater of 50 employees or one-third of the workforce at a particular location.
Some companies attempt to avoid providing a WARN notice by staggering layoffs to stay below those thresholds. However, WARN requires employers to aggregate some layoffs when counting the number of affected persons. Employers should look back and forward 30 days and include any persons let go for economic reasons in their WARN calculations. If employees are laid off based on the same business reasons, the look back and look forward periods extend to 90 days.
Some companies inadvertently violate WARN when they conduct a small reduction in force followed by a larger one that falls within the above windows. Because the initial employees laid off were not provided with a WARN notice, the company violates the law by conducting additional reductions within 30 or 90 days.
Employers that intend to stagger layoffs should carefully plan the timing of these actions in advance to determine when and if notice needs to be provided. If they do not provide notice to an initial group of employees let go below the WARN threshold, additional layoffs may need to be delayed until the applicable window has passed.
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