DOL Issues New WARN Act FAQs

With employers experiencing unexpected shutdowns and facing potential mass layoffs due to the COVID-19 pandemic, the Department of Labor (“DOL”) recently issued COVID-19 guidance for employers regarding the federal Worker Adjustment and Retraining Notification (“WARN”) Act.  The FAQs can be found here.

The WARN Act is a federal statute that requires covered employers to provide employees 60 days’ advance written notice before closing a plant or conducting a mass layoff.  The WARN Act applies to employers  that employ 100 or more full-time employees (not counting workers who have worked fewer than 6 months on the job).  Covered employers, unless protected by an exemption, who do not comply with the WARN Act’s requirements can be liable to affected employees for wages and benefits for each missed day of notice.

The DOL’s FAQs provide helpful reminders regarding WARN’s notice requirements if employers experience an unexpected shutdown due to an emergency pandemic.  One key reminder is that a temporary layoff or furlough lasting less than six months is not considered an “employment loss” under WARN meaning the employer is not required to provide a WARN notice. However, these employees must be recalled to work within six months to avoid the notice requirement and this may or may not be possible depending upon the uncertainty of when businesses will reopen due to the pandemic.

Another key takeaway from the DOL’s FAQs is that employers may be able to remedy its failure to provide a WARN notice when a mass layoff or plant closing was caused by “unforeseeable business circumstances.”  In this scenario, employers must not have reasonably foreseen a mass layoff or plant closing at the time that the 60 days’ notice would have been required. Employers can remedy this issue if it submits a written WARN notice as soon as practicable which also includes a brief statement of the reason for giving less than 60-days’ notice.

Employers should also be aware of state law requirements similar to the federal WARN Act.  Although Virginia does not have a state WARN act, some of the surrounding states, such as Maryland, have adopted a WARN-type law which has different requirements than the federal WARN Act.  Employers that conduct business in multiple states must be aware of what is required under each WARN-type act if it plans or has already conducted a mass layoff or plant shutdown due to the COVID-19 pandemic.

Importantly, as the DOL’s FAQs dictate, employers are not fully exempt from providing WARN notices due to the pandemic. Employers must remain mindful of their potential WARN obligations to ensure that they do not end up with a lawsuit at the end of the pandemic.