Business Closures Or Layoffs May Trigger The WARN Act

Volume: 22 | Issue: 4
January 23, 2023

The federal Worker Adjustment and Retraining Notification Act (“WARN Act”) does not get much attention, but it can be a source of significant liability for covered employers. As such, we have provided a brief refresher on the Act’s basic requirements. More detailed information about the Act can be found on our website and the Department of Labor’s (DOL) website.

The WARN Act provides protections to workers and their families by requiring covered employers to provide 60-calendar days advance notice of certain types of large-scale business closures and reductions-in-force. In general, the WARN Act applies to private businesses, including non-profits, employing 100 or more employees.

A covered employer’s duty to provide notice is triggered upon a “plant closing” or a “mass layoff.” A plant closing involves either (a) a permanent or temporary shutdown of a single site of employment; or (b) a permanent or temporary shutdown of one or more facilities (buildings) or operating units within a single site of employment, which results in the loss of employment of at least 50 employees. A mass layoff is a reduction-in-force that results in an employment loss at a single site of employment for either (a) 33% or more of the active employees, but at least 50 employees; or (b) 500 employees.

Notice must be given to the affected employees (or their collective bargaining representatives) as well as the Rapid Response Unit of Nevada’s Department of Employment, Training & Rehabilitation’s Employment Security Division and the chief elected local government official (typically a city’s mayor or the chairperson of the county commissioners). In general, notices to employees should state such information as whether the planned action is permanent or temporary, whether bumping rights exist, the expected date of the closing or layoff, and the expected date of the employee’s separation.

If you believe the WARN Act may apply to your business and you are considering layoffs or closings, we encourage you to contact a KZA attorney for more detailed information and assistance. 

KZA Employer Report articles are for general information only; they are not intended and should not be construed to be legal advice. Reading or replying to such articles does not establish an attorney-client relationship. In addition, because the subject matters and applicable laws discussed in Employer Report articles are often in a state of change and not always applicable to every type of business entity or organization, readers should consult with counsel before making decisions based on the same.

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