One of the important legislations concerning mass layoffs and closing of plants is the Worker Adjustment and Retraining Notification (WARN) Act. This Act requires employers to inform their employees beforehand if there is going to be mass layoffs or plant closures. The notice period for informing patients about this proposed action is 60 days.
The WARN Act applies to employers who employ 100 people or more. This act takes the number of employees present in any of the organization’s locations, even if the closure is not happening at all the locations.
The idea of WARN Act is to help employees anticipate an impending layoff and make preparations for facing it. They could think of seeking employment elsewhere or could enhance their skills by enrolling for a short term course in any related area of their work. This would make them better suited candidates when they seek employment next.
Who may be informed?
Employees, irrespective of whether they are permanent or temporary, need to be informed at least sixty days prior to the closure of the unit or the layoffs. The management has to also inform unions and respective local and state governments about the decision.
What situations warrant informing employees?
The following criteria warrant a WARN notice:
- The business that has more than100 full-time workers: this excludes workers who are a) due to retire in less than six months on the job and b) those who put in lesser than 20 hours per week;
- It is laying off no fewer 50 people at any single site of its employment at one stroke;
- It employs at least 100 workers who together put in at least 4,000 hours per week;
- It applies to businesses which could be either of these: a) a private for-profit business; b) private non-profit organization, or c) a quasi-public entity functioning autonomously from regular government.
The employer is not required to inform striking employees about the decision. The employer is also exempt from informing part-time workers working from outside for the company for a specific project or work or duration. These are employees who are not on the company’s rolls or are working as consultants and are actively working for other organizations too, during this time. Also, if due to unforeseen circumstances, a plant has to close well in advance of the sixty days stated in the Act, the employer is not punishable. In situations where there is an unanticipated event like a natural disaster, the employer is exempt from informing employees.
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