Worker Adjustment and Retraining
Notification (WARN) Act
Benjamin Collins
Analyst in Labor Policy
September 4, 2012
Congressional Research Service
7-5700
www.crs.gov
R42693
CRS Report for Congress
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epared for Members and Committees of Congress
Worker Adjustment and Retraining Notification (WARN) Act
Summary
Enacted by the 100th Congress, the Worker Adjustment and Retraining Notification (WARN) Act
requires qualified employers that intend to carry out plant closings or mass layoffs to provide 60
days’ notice to affected employees, states, and localities. The purpose of the notice to workers is
to allow them to seek alternative employment, arrange for retraining, and otherwise adjust to
employment loss. The purpose of notifying states and localities is to allow them to promptly
provide services to the dislocated workers and otherwise prepare for changes in the local
labor market.
The WARN Act applies to employers with at least 100 or more full-time employees or
equivalents. Federal, state, and local government employers are not subject to the act.
Broadly speaking, there are three types of events that require notification under the WARN Act.
Each of these events is limited to a single site of employment; employment losses by a single
employer across multiple sites are not aggregated. Events that trigger the requirements of the
WARN Act are
• a plant closing resulting in employment losses of at least 50 employees;
• a mass layoff of at least 50 employees where the employment loss consists of at
least 33% of employment at the site; or
• a mass layoff with an employment loss of 500 or more at a single site of
employment, regardless of its proportion of total employment at the site or if the
employment loss is part of a plant closing.
For the purposes of the WARN Act, an employment loss is defined as an involuntary termination,
layoff exceeding six months, or a reduction in hours worked exceeding 50% for each of six
consecutive months. In addition to the three events described above, an employer may also be
subject to the WARN Act if it engages in several layoffs during a 90-day period that, in aggregate,
meet the criteria of an applicable event. Short-term layoffs that are later extended to six months or
more may also trigger WARN Act requirements.
The act and accompanying regulations also specify situations in which an otherwise covered
employer may be exempt from WARN Act requirements. Generally, these exceptions relate to
unanticipated situations such as unforeseeable business circumstances or natural disasters.
The WARN Act is enforced through the federal court system. While the Department of Labor is
permitted to establish regulations related to the act and offer non-binding guidance to employers
and workers, all penalties and settlements are administered through the courts.
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Worker Adjustment and Retraining Notification (WARN) Act
Contents
Background and Purpose ................................................................................................................. 1
Legislative History .................................................................................................................... 1
Provisions of the WARN Act ........................................................................................................... 2
Covered Employers ................................................................................................................... 2
Covered Events.......................................................................................................................... 2
Covered Employees................................................................................................................... 3
Part-Time Employees .......................................................................................................... 3
Employees Not Entitled to Notice....................................................................................... 3
Notification Requirements......................................................................................................... 3
Bumping Rights .................................................................................................................. 4
Enforcement and Penalties ........................................................................................................ 4
Exceptions that Allow for a Notice Period of Less Than 60 Days ............................................ 5
Other Special Circumstances..................................................................................................... 6
Transfers or Reassignments................................................................................................. 6
Strikes and Lockouts ........................................................................................................... 6
Temporary Employees......................................................................................................... 6
Sale of a Business................................................................................................................ 7
Notification of Layoffs that Do Not Meet WARN Act Criteria....................................................... 7
WARN Act Notifications and Compliance ...................................................................................... 8
Contacts
Author Contact Information............................................................................................................. 8
Acknowledgments ........................................................................................................................... 8
Congressional Research Service
Worker Adjustment and Retraining Notification (WARN) Act
Background and Purpose
The Worker Adjustment and Retraining Notification (WARN) Act requires qualified employers
that intend to carry out plant closings or mass layoffs to provide 60 days’ advance notice to
affected employees, states, and localities. There are several purposes to the WARN Act. Notices
provide workers with time to seek alternative employment, arrange for retraining, and otherwise
adjust to the prospect of employment loss. The act also provides notice to state dislocated worker
units so that services can be provided promptly to the affected employees and to local
governments so they can adjust to upcoming changes in their local labor market.
Although “retraining” appears in its title, the WARN Act does not authorize or fund training
activities. Workers affected by layoffs covered by the WARN Act may be eligible for training
services under the dislocated worker provisions of the Workforce Investment Act (WIA) or, if
their job loss is attributable to foreign competition, Trade Adjustment Assistance for Workers
(TAA).1
Legislative History
Legislation related to the notification of workers prior to mass layoffs and plant closings was first
introduced at the federal level in 1973.2 The issue proved to be contentious and more than a
decade elapsed before Congress enacted the WARN Act (P.L. 100-379) in 1988 without President
Ronald Reagan’s signature.3 The law became effective in February 1989. Except for some small
changes to align the WARN Act with terminology changes elsewhere in law, the WARN Act has
not been amended.
Most recent proposals related to the WARN Act have proposed expanding the law’s breadth or
otherwise increasing employer responsibilities. The most recent amendment to the act to come up
for a vote was in the 110th Congress, when the House passed H.R. 3920, the Trade and
Globalization Assistance Act of 2007.4 Among other labor provisions, the bill would have
increased the notice period under the WARN Act from 60 to 90 days and required employers to
inform the Secretary of Labor of their intended layoffs.
1 For more information on WIA, see CRS Report R41135, The Workforce Investment Act and the One-Stop Delivery
System, by David H. Bradley. For more information on TAA, see CRS Report R42012, Trade Adjustment Assistance
for Workers, by Benjamin Collins.
2 The Trade Act of 1974 (Title II, Section 283 of P.L. 93-618) asked firms that planned to move operations outside the
United States to provide at least 60 days advance notice to employees likely to be adversely affected by their actions as
well as to the Secretaries of Labor and Commerce.
3 For more information, see U.S. House of Representatives, Committee on Education and Labor, Legislative History of
S. 2527, 100th Congress, Worker Adjustment and Retraining Notification Act, P.L. 100-379, 100th Cong., 2nd sess.,
serial no. 101-K (Washington, DC: GPO, 1990).
4 After passing the House, the bill was referred to the Senate Committee on Finance, where no action was taken.
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Worker Adjustment and Retraining Notification (WARN) Act
Provisions of the WARN Act
The WARN Act requires covered employers to provide 60 calendar days’ notice prior to qualified
employment losses of 50 or more.5 The key provisions of the act are described below and at Title
29, Chapter 23 of the U.S. Code (29 U.S.C. 2101-2109).
Covered Employers
To be subject to the WARN Act, employers must have at least 100 full-time employees or 100 or
more employees who work for at least a total of 4,000 hours per week (exclusive of overtime).
Persons who are temporarily laid off or are on leave but have a reasonable expectation of being
recalled are also covered and counted toward the employer-size threshold. The statute and
regulations offer guidance on defining employers and determining if subsidiaries and independent
contractors are separate from a parent company.6
Federal, state, local, and federally recognized tribal governments are not subject to the WARN
Act. However, public and quasi-public entities that engage in business and that function
independently of those governments are covered if they meet the employer-size threshold.
Covered Events
Broadly speaking, there are three types of events that require notification under the WARN Act.
Each of these events is limited to a single site of employment; employment losses by a single
employer across multiple sites are not aggregated. Events that trigger the requirements of the
WARN Act are
• a plant closing resulting in employment losses of at least 50 employees;7
• a mass layoff of at least 50 employees where the employment loss consists of at
least 33% of employment at the site; or
• a mass layoff with an employment loss of 500 or more at a single site of
employment, regardless of its proportion of total employment at the site or if the
employment loss is part of a plant closing.
For the purposes of the WARN Act, employment losses are defined as involuntary separations of
workers exceeding six months or a reduction in hours worked of at least 50% during each month
for a six-month period.8 Any employment losses during a 30-day period are considered a single
event for the purposes of the WARN Act.
5 Some states have developed standards that are stricter than the federal WARN Act. These standards may increase the
period of notice, cover smaller employers, or cover layoffs of fewer than 50 workers.
6 For complete details on covered employers, see 29 U.S.C. §2101(a)(1) and 20 C.F.R. §639.3. For information on the
treatment of subsidiaries and independent contractors, see 20 C.F.R. §639.3(a)(2).
7 A plant closing is defined as the shutdown of a single site of employment or one or more facilities or operating units
within a single site of employment. See 29 U.S.C. §2101(a)(2).
8 20 C.F.R. §639.3(f).
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Worker Adjustment and Retraining Notification (WARN) Act
There are also circumstances in which the WARN Act can be applied retroactively:
• If an employer announces layoffs that are for less than six months but otherwise
meet the WARN Act criteria and then subsequently extends the layoffs past six
months, the employer may be subject to WARN Act notification responsibilities.
Unless the employer can establish that the layoff extension was due to
circumstances that were unforeseeable at the time of the original layoff, the case
is treated as if notice was required for the original layoff.9
• If an employer engages in a series of layoffs that are below WARN Act levels,
they may be aggregated for up to 90 days unless the employer can establish that
each layoff was due to distinct, unrelated events. In the case of smaller layoffs
adding up to a WARN-required level, each employee must receive notice 60 days
prior to his or her date of termination.10
Covered Employees
Employees covered by the statute include hourly and salaried employees, managers, and
supervisors on the employer’s payroll. The law does not apply to an employer’s business partners,
contract employees who have an employment relationship with and are paid by another employer,
and self-employed individuals.
Part-Time Employees
Part-time employees are defined as persons who work on average fewer than 20 hours per week
or who have been employed fewer than 6 of the 12 months preceding the date on which notice is
required. Part-timers thus include recently hired employees working full-time hours and seasonal
(part-year) workers. Although part-time employees are not counted toward the threshold for
determining employer coverage under the law, they nonetheless are due advance notice from
covered employers.
Employees Not Entitled to Notice
Employees who are counted toward the firm-size threshold but are not entitled to advance notice
include U.S. workers who are located at an employer’s facility in a foreign country and
individuals who are clearly told upon being hired that their employment is temporary (e.g.,
limited to the time it takes to complete a specific project).
Notification Requirements
Written notice of WARN events must be provided to each affected employee 60 calendar days
prior to layoff.11 If the affected employees are covered by a collective bargaining agreement,
notification can instead be issued through the employees’ bargaining representative.
9 See 29 U.S.C. §2102(c).
10 See 29 U.S.C. §2102(d).
11 The act defines affected employees as “employees who may reasonably be expected to experience an employment
(continued...)
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Worker Adjustment and Retraining Notification (WARN) Act
In addition to the affected employees or their representative, an employer must notify the state
entity responsible for carrying out rapid response activities12 and the chief elected official of the
local government within which the layoffs are to occur.13
The required content of the notifications varies somewhat depending on whether they are being
issued to employees, union representatives, or government entities.14 All notifications must
include (1) a description of the planned action and a statement as to whether the planned action is
expected to be permanent or temporary, (2) the expected date or dates when the layoffs will
commence,15 and (3) the name and telephone number of a company official to contact for
more information.
Bumping Rights
In some cases, company policy or a collective bargaining agreement may permit bumping rights.
Typically, bumping rights allow a more senior employee whose job is eliminated to replace
(bump) a less senior worker whose job was not eliminated. Under bumping rights, it is possible
that the worker who is ultimately laid off is not the worker whose job was eliminated.
In cases where a workplace has bumping rights but workers are not covered by a collective
bargaining agreement, the employer must attempt to identify the worker who will ultimately be
terminated subsequent to bumping and provide him or her with notice. If the employer is not able
to reasonably identify the worker who will ultimately be laid off, notice can be issued to the
incumbent worker whose job is being eliminated.
In cases where bumping rights exist, the affected employees are covered by a collective
bargaining agreement, and notice is issued to an employee representative rather than the
employees themselves, it is not necessary for the employer to identify the ultimate bumpees.
Instead, the employer’s notice to the employee representative must identify the specific positions
that will be eliminated. In these cases, the workers’ representative is responsible for identifying
and notifying the ultimate bumpee.
Enforcement and Penalties
The U.S. Department of Labor does not have any investigative or enforcement authority under the
law. It is authorized to write regulations and provide assistance in understanding them.
(...continued)
loss as a consequence of a proposed plant closing or mass layoff[.]” See 29 U.S.C. §2101(a)(5).
12 Rapid response activities are state-administered services to dislocated workers following a mass layoff. Services
include, but are not limited to, career counseling, job search assistance, education and training services, and access to
unemployment insurance.
13 See 29 U.S.C. §2102(a).
14 Complete requirements for each notice are at 20 C.F.R. §639.7.
15 The date may be a specific day, a schedule of layoffs, or a 14-day period in which separations are expected to occur.
In cases where an employer provides a 14-day period in which layoffs are expected to occur, notice must be issued 60
days prior to the beginning of the 14-day period. See 20 C.F.R. §639.7(b) for further details.
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Worker Adjustment and Retraining Notification (WARN) Act
The WARN Act is enforced through the federal court system. Employees, their representatives, or
units of local government can bring civil actions in district court against employers thought to
have violated the WARN Act. A court does not have the authority to stop a plant closing or
mass layoff.
Employers who violate the WARN Act are liable for back pay and benefits (e.g., the cost of
medical expenses that would have been covered had the employment loss not occurred) to each
aggrieved employee. The penalty is calculated for each working day that notice was not provided
up to a maximum of 60 days. In other words, the 60-day liability is reduced for each day that
notice was provided. Maximum liability may be less than 60 days for those employees who had
worked for the employer for fewer than 120 days.
In addition to payments to workers, employers found to be in violation of the WARN Act may
also be subject to a $500 civil fine for each day fewer than 60 that they provided notice to
affected employees. An employer can avoid the civil penalty entirely if each aggrieved employee
is paid the full amount for which the employer is liable within three weeks from the date of the
plant closing or mass layoff.16
Exceptions that Allow for a Notice Period of Less Than 60 Days
The statutory language of the WARN Act specifies three exceptions in which employers may
provide less than 60 days’ notice to employees and jurisdictions affected by an employment
loss:17
• The faltering company exception: Employers can provide reduced notice for plant
closings, but not for mass layoffs, if they had been seeking financing or business
for their faltering enterprises, thought they had a realistic chance of obtaining
funds or new business sufficient to allow the facilities to remain open, and
believed in good faith that giving notice would have prevented them from getting
the capital or business necessary to continue their operations.
• The unforeseeable business circumstances exception: Employers can provide
reduced notice if they could not reasonably foresee the business circumstances
that caused the plant closings or mass layoffs. Circumstances that occurred
without warning and that were outside the employer’s control could include (1) a
major client terminating a large contract with the employer, (2) a strike at a
supplier of key parts to the employer, or (3) the swift onset of a deep economic
downturn or a non-natural disaster (e.g., a terrorist attack).
• The natural disaster exception: Employers may also provide reduced notice if the
layoff is due to a natural disaster such as a flood, earthquake, drought, or storm.
If a plant closing or mass layoff is indirectly due to natural disasters, the
exception would not apply; however, the unforeseen business circumstances
exception might.
16 See 29 U.S.C. §2104(a)(3).
17 See 29 U.S.C. §2102(b)
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Worker Adjustment and Retraining Notification (WARN) Act
Other Special Circumstances
The WARN Act also addresses several special circumstances and the responsibilities of the
affected parties in each circumstance.
Transfers or Reassignments
If a closing or layoff takes place due to the relocation or consolidation of all or part of an
employer’s business, the plant closing or mass layoff is not considered an employment loss if
before the action,18
• the employer offers to transfer an employee to another site within reasonable
commuting distance and no more than a six-month break in employment occurs
(regardless of whether the employee accepts or rejects the offer); or
• the employee accepts a transfer to another site—regardless of distance—with no
more than a six-month break in employment, within 30 days of the employer’s
offer or of the closing/layoff, whichever is later.
Strikes and Lockouts
Plant closings or mass layoffs that are the result of a strike or lockout are exempt from the notice
requirement unless employers lock out employees to evade compliance with the act.19 “Economic
strikers” whom employers permanently replace do not count toward the employee-size thresholds
necessary to trigger the notice requirement.20 Non-striking employees who experience an
employment loss directly or indirectly associated with a strike and employees who are not
members of the bargaining unit involved in the contract negotiations that prompted a lockout are
entitled to advance notice.21
Temporary Employees
Temporary employees and other employees associated with projects of limited duration are not
entitled to notice under the WARN Act so long as the employees were hired with the
understanding that their employment was limited in duration.22 Regulations state that an
understanding of temporary employment can be established by “reference to employment
contracts, collective bargaining agreements, or employment practices of an industry or locality,
but the burden of proof will lie with the employer.”23
18 See 29 U.S.C. §2101(b)(2).
19 See 29 U.S.C. §2103(2).
20 Economic strikers are those employees who go on strike over wages, hours, or other working conditions during
contract negotiations.
21 See 20 C.F.R. §639(d).
22 See 29 U.S.C. §2103(1).
23 See 20 C.F.R. §639.5(c) for additional details on establishing temporary employment.
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Worker Adjustment and Retraining Notification (WARN) Act
Sale of a Business
The sale of all or part of a business does not in itself produce an employment loss because
individuals who were employees of the seller through the sale’s effective date are thereafter
considered employees of the buyer. If a covered plant closing or mass layoff takes place up to and
including the effective date of the sale, it is the responsibility of the seller to provide notice. If the
seller knows the buyer has definite plans to initiate a covered plant closing or mass layoff within
60 days of the purchase, the seller may give notice to affected employees as an agent of the buyer
if so empowered by the buyer. If not, the buyer becomes responsible for providing the requisite
advance notice.24
Notification of Layoffs that Do Not Meet WARN
Act Criteria
In addition to establishing criteria and notification procedures for applicable layoffs and plant
closures, the WARN Act also encourages procedures for layoffs that may not require formal
notification:
It is the sense of Congress that an employer who is not required to comply with the notice
requirements of section 2102 of this title should, to the extent possible, provide notice to its
employees about a proposal to close a plant or permanently reduce its workforce.25
Regulations have reiterated and expanded upon this sentiment:
Notice in ambiguous situations. It is civically desirable and it would appear to be good
business practice for an employer to provide advance notice to its workers or unions, local
government and the State when terminating a significant number of employees. In practical
terms, there are some questions and ambiguities of interpretation inherent in the application
of WARN to business practices in the market economy that cannot be addressed in these
regulations. It is therefore prudent for employers to weigh the desirability of advance notice
against the possibility of expensive and time-consuming litigation to resolve disputes where
notice has not been given. The Department encourages employers to give notice in all
circumstances.26
Neither statute nor regulations discourage or state a penalty associated with notices that are not
followed by an applicable mass layoff or plant closure. Regulations, however, prohibit employers
from regularly issuing WARN Act notices so as to perpetually be in compliance with the law in
the event of a mass layoff or plant closure.27
24 See 29 U.S.C. §2101(b)(1).
25 See 29 U.S.C. §2106.
26 See 20 C.F.R. §639.1(e).
27 Regular issuance of notice is also known as “rolling notice.” See 20 C.F.R. §639.10(b).
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Worker Adjustment and Retraining Notification (WARN) Act
WARN Act Notifications and Compliance
Since the WARN Act does not require firms to notify the federal government prior to layoffs or
plant closings, there is no central data source for information on WARN Act notifications. As
such, it is not possible to easily identify how many WARN Act notifications were issued in a
particular timeframe, nor is there a simple procedure for identifying how many notifications were
followed by an applicable mass layoff or plant closing.
In 2003, the Government Accountability Office (GAO; then the General Accounting Office)
released a report in which it obtained information on WARN notices from state dislocated worker
units and then matched them to mass layoff and plant closure data from the Bureau of Labor
Statistics. The report found that of the 5,349 WARN notices issued, only 717 (13%) could be
matched to a specific mass layoff or plant closing. The report also identified 1,257 additional
events that appeared to require notification under the WARN Act in which it could not find a
corresponding layoff notice filed with the state.28
Author Contact Information
Benjamin Collins
Analyst in Labor Policy
bcollins@crs.loc.gov, 7-7382
Acknowledgments
Linda Levine authored a previous version of this report.
28 See Government Accountability Office (GAO), The Worker Adjustment and Retraining Notification Act: Revising
the Act and Educational Materials Could Clarify Employer Responsibilities and Employee Rights, GAO-03-1003,
September 19, 2003, http://www.gao.gov/products/GAO-03-1003.
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