The WARN Act was enacted in 1988 to protect workers, their families, and communities by requiring employers with 100 or more employees to provide at least 60 calendar days' advance written notice of a plant closing or mass layoff. The law applies to private, for-profit employers as well as private, nonprofit employers and quasi-public entities. The notice gives workers and their families time to transition to new jobs or training programs and allows local governments to prepare for the economic impact.
Not all employers and employees are covered by the WARN Act. Understanding the coverage thresholds is essential:
The WARN Act applies to employers that have 100 or more full-time employees, or 100 or more employees who in the aggregate work at least 4,000 hours per week (excluding overtime). Part-time employees are counted toward the 100-employee threshold only if they work an average of 20 or more hours per week or at least 5 of the 12 preceding months.
WARN Act protections apply to all employees of a covered employer, including management and supervisory employees. However, certain categories of workers are exempt, including:
The WARN Act requires notice in three specific scenarios:
A plant closing occurs when an employer permanently or temporarily shuts down a single site of employment, or one or more facilities or operating units within a single site, resulting in an employment loss for 50 or more full-time employees during any 30-day period.
A mass layoff occurs when an employment loss at a single site of employment affects 500 or more full-time employees, or 50 to 499 full-time employees if they make up at least 33% of the employer's active workforce at that site, during any 30-day period.
An employment loss also triggers WARN notice if it involves a reduction in hours of more than 50% for 6 months or more.
Covered employers must provide at least 60 calendar days' advance written notice to affected employees or their representatives (such as a labor union), the State Dislocated Worker Unit, and the appropriate local government officials. The notice must include:
One of the most common misconceptions is that the WARN Act requires employers to pay severance. In reality, the WARN Act requires advance notice, not severance pay. However, if an employer fails to provide the required 60-day notice, they may be liable for back pay and benefits for each day of notice that was not provided. This is often referred to as "WARN Act pay" or "pay in lieu of notice."
WARN Act liability can effectively function as severance in cases where the employer does not provide proper notice. The amount owed is calculated as follows:
| Scenario | Notice Provided | Employer Liability |
|---|---|---|
| Full compliance | 60 days | None (beyond contractual severance) |
| Partial notice | 30 days | 30 days of back pay + benefits |
| No notice | 0 days | 60 days of back pay + benefits |
| Pay in lieu of notice | 0 days (but paid) | None, if 60 days' wages and benefits are paid |
The WARN Act includes several exceptions where the 60-day notice requirement may be reduced or eliminated:
This exception applies when a company is actively seeking capital or business that would keep the facility open, and the employer reasonably believes that giving notice would prevent obtaining the needed capital or business. Notice must still be given as soon as practicable, and the employer must provide a brief statement of the basis for reducing the notice period.
This applies when the plant closing or mass layoff is caused by business circumstances that were not reasonably foreseeable at the time notice would have been required. Examples include sudden and unexpected events like the loss of a major contract or an economic crisis.
This applies when the closing or layoff is the direct result of a natural disaster such as a flood, earthquake, or drought. The employer must give as much notice as is practicable.
Several states have enacted their own plant closing laws, often referred to as "mini-WARN" laws, which may be more stringent than the federal WARN Act. For example:
Employees should check both federal and state laws to determine the full extent of their protections.
The WARN Act is enforced through private legal action. Employees or their representatives can file a lawsuit in federal or state court. Remedies include:
The statute of limitations for WARN Act claims is two years from the date of the violation, or three years if the violation is found to be willful.
Many US companies offer severance packages that go beyond WARN Act requirements. A typical company severance policy might provide 1 to 2 weeks of pay per year of service, capped at a certain number of months. When WARN Act liability exists, it is separate from and in addition to any company-provided severance, unless the severance agreement explicitly states that the payment satisfies WARN obligations.
Employees should be aware that accepting a company severance package may require signing a release of claims, which could waive their right to pursue WARN Act violations. It is important to carefully review any severance agreement and consider consulting an employment attorney before signing.
Disclaimer: The information provided on this page is for general informational purposes only and does not constitute financial, legal, or tax advice. Always consult with a qualified professional advisor before making financial decisions. Rates, thresholds, and regulations change frequently — verify current figures with official government sources.