What Is the WARN Act?
The Worker Adjustment and Retraining Notification Act (WARN Act) of 1988 requires employers to provide 60 days' advance written notice before conducting plant closings or mass layoffs. The purpose of the law is to give workers and their communities time to prepare for the economic impact of major employment losses.
For HR professionals studying for the SHRM-CP or SHRM-SCP exam, the WARN Act is an important compliance topic that tests your understanding of notification thresholds, covered employers, and the limited exceptions to the notice requirement. These details matter in practice, as WARN Act violations can result in significant financial penalties.
The WARN Act is enforced through private lawsuits in federal court, and remedies include back pay and benefits for each day of the violation, up to 60 days. There is no administrative enforcement mechanism through a federal agency.
Covered Employers and Triggering Events
The WARN Act applies to employers with 100 or more full-time employees (or 100 or more employees, including part-time workers, who collectively work at least 4,000 hours per week, excluding overtime). Key triggering events include:
Plant closing: The permanent or temporary shutdown of a single site of employment (or one or more facilities or operating units within a site) that results in an employment loss of 50 or more full-time employees during any 30-day period.
Mass layoff: A reduction in force at a single site that results in an employment loss during any 30-day period for:
- At least 500 full-time employees, OR
- At least 50 full-time employees if they represent at least 33% of the active workforce at the site
"Employment loss" includes termination (other than for cause, voluntary departure, or retirement), a layoff exceeding 6 months, or a reduction in hours of more than 50% during each month of any 6-month period.
The WARN Act also includes an "aggregation" provision: if separate groups of employees at a single site each experience employment losses that do not individually meet the threshold, but together they do within a 90-day period, the WARN Act may still apply unless the employer can demonstrate that the actions were taken for separate and distinct reasons.
Notice Requirements
The 60-day written notice must be provided to:
- Affected employees or their union representatives (if unionized)
- The state dislocated worker unit (or equivalent state agency)
- The chief elected official of the local government where the employment site is located
The notice must include specific information such as whether the action is expected to be permanent or temporary, the expected date of the first separation, the job titles of affected positions, and the names and addresses of affected employees (for notice to the state and local government). If the date or other information changes, the employer must provide updated notice as soon as practicable.
Exceptions to the 60-Day Requirement
Three exceptions may allow less than 60 days' notice, though the employer must still provide as much notice as practicable:
- Faltering company: Applies only to plant closings (not mass layoffs). The employer must have been actively seeking capital or business that would have avoided or postponed the closing, and reasonably believed that giving notice would have prevented it from obtaining that capital or business.
- Unforeseeable business circumstances: The closing or layoff was caused by business circumstances that were not reasonably foreseeable at the time notice would have been required. Examples include a sudden, unexpected loss of a major contract or a sudden market downturn.
- Natural disaster: The closing or layoff is a direct result of a natural disaster such as a flood, earthquake, or drought.
On the SHRM exam, these exceptions are commonly tested. Remember that even when an exception applies, the employer must provide as much notice as is practicable and must include a brief statement of the basis for reducing the notice period.
Start Practicing Today
The WARN Act is tested on the SHRM certification exam, which features 134 questions over 4 hours at Prometric or OnVUE. Know the employer coverage threshold, triggering events, notice requirements, and exceptions.
SHRMpractice.com provides practice questions on the WARN Act and related workforce restructuring topics. Take our diagnostic to identify areas for study, then sign up to access our full exam preparation resources.