Tuesday, March 1, 2016

WARNing About Layoffs

Employers who plan to conduct layoffs should be aware of the WARN Act. Short for the Worker Adjustment and Retraining Notification Act, the WARN Act requires employers to provide advance notice of mass layoffs to a number of people. Failure to provide this notice could subject an employer to harsh penalties. 

Both the federal government and the State of Illinois have passed WARN Acts. The Illinois WARN Act is essentially the same as the federal version except that it applies in more circumstances. The Act applies to any private-sector employer with at least 75 full-time employees who will conduct a plant closing or a mass layoff. The Act considers a mass layoff to be firing or relocating 1/3 of full-time workers in a 30-day period. 

The Act requires an employer to provide 60 days of advance notice of a mass layoff to: 1) the employees who will be laid off, 2) the employees’ union representatives, 3) the Illinois Department of Commerce and Economic Opportunity, and 4) the mayor of the city and the president of the county board where the employer is located. An employer can provide notice of the mass layoff through regular mail, personal delivery, and probably email. 

The penalties for failing to provide advance notice of mass layoffs are severe. If an employer conducts a mass layoff before 60 days have passed since it provided notification of the layoff, it must provide back pay and benefits to each employee laid off. So, if an employer conducts a mass layoff 30 days after providing notice of the layoff, it would be required to provide 30 days of pay and benefits to each employee laid off. 

Additionally, an employer can be fined up to $500 for each day it lays off employees prior to the elapse of 60 days from providing advance notice. Employees can sue their employer for failing to comply with the WARN Act and can obtain attorneys’ fees if they win. 

For more information on complying with the WARN Act, or for information on what a local government should do if an employer in its jurisdiction has failed to comply with the WARN Act, contact an Ancel Glink attorney. Ancel Glink attorneys can also help draft WARN Act ordinances for local governments.