As President Donald Trump continues his ongoing trade wars, including tariffs, businesses are responding with massive layoffs to shoulder the increased cost of production. Mack Trucks, Volvo, General Motors and Estée Lauder are some of the employers that have announced layoffs, specifically citing the impact of the Trump Administration’s tariffs. Smaller employers are also laying off staff. Any larger employer that is considering layoffs should be aware that it must abide by the WARN Act (the “Act”). While the importance of the law comes and goes depending on the state of the economy, compliance is critical because the penalties for violating it, even if unintentionally, can be quite costly.

The Worker Adjustment and Retraining Notification Act (“WARN”) is a set of US labor laws that require most employers with 100 or more employees to give a minimum 60-day notice of mass layoffs or plant closings. The Act is meant to cushion the blow of employment loss to workers, their families, and their communities. The advance notice allows workers and their families transition time to seek alternative jobs, apply for unemployment insurance or enter skills training programs.

A WARN notice is required when a business with 100 or more full-time workers (not counting workers who have less than 6 months on the job and workers who work fewer than 20 hours per week) is laying off at least 50 people at a single site of employment or employs 100 or more workers who work at least a combined 4,000 hours per week, and is a private for-profit business, private non-profit organization, or quasi-public entity separately organized from regular government.

According to the Department of Labor, notice to individual employees must be written in clear and specific language that employees can easily understand and must contain at a minimum the following requirements:

• A statement as to whether the planned action is expected to be permanent or temporary and, if the entire plant is to be closed, a statement to that effect;
• The expected date when the plant closing or mass layoff will commence and the expected date when the individual employee will be separated;
• An indication as to whether bumping rights exist; and
• The name and telephone number of a company official to contact for further information.

The notice may include additional information useful to the employees such as available dislocated worker assistance, and, if the planned action is expected to be temporary, the estimated duration, if known. An employer may use any reasonable method of delivery designed to ensure receipt of the written notice at least 60 days before separation. However, preprinted notices regularly included in each employee’s paycheck or pay envelope and verbal notices do not meet the WARN Act requirements. Additional information is required when providing notice to the bargaining agent/chief elected officer of each affected union or local union official.

An employer who violates WARN provisions is liable to each employee for an amount equal to back pay and benefits for the period of the violation, up to 60 days. The liability may be reduced by the period of any notice that was given and any voluntary payments that the employer made to the employee, sometimes referred to as “pay in lieu of notice.” The employer must also pay the employee’s attorney’s fees.  To avoid these penalties if a mass layoff or plant closure is in your future, consult with legal counsel to ensure full compliance with WARN provisions.