Publication Date

9-26-2007

Abstract

Congress has passed legislation to facilitate the reemployment of workers who through no fault of their own are terminated by their employers. Statutes include the Workforce Investment Act, which provides various reemployment services to dislocated workers among others; the Trade Adjustment Assistance program for workers, which provides reemployment services to trade-affected displaced workers; and the Worker Adjustment and Retraining Notification (WARN) Act, which provides advance notice of mass layoffs and plant closings. Congress enacted the WARN Act (P.L. 100-379) in 1988 after lengthy contentious debate. There was little interest in the law during the decade following its passage because generally robust economic conditions prevailed. Interest has renewed in the current decade for a variety of reasons, including the growth in offshore outsourcing (offshoring) of U.S. jobs and perceived shortcomings of the WARN Act. Most recently, S. 1792 and H.R. 3662 were introduced. The bills would amend the statute to require more businesses to provide notice to more workers and lengthen the notice period. They also would increase the back pay penalty for violation of the law and authorize the Secretary of Labor to bring civil action on behalf of workers as well as make educational materials more readily available. While S. 1792 would require employers to notify the U.S. Department of Labor of covered plant closings and mass layoffs after they had occurred, H.R. 3662 would require advance notice to be given to the Secretary of Labor and to U.S. senators and representatives, state senators and representatives, and state governors in the areas in which the plant is located. The WARN Act now requires employers to provide written notice to displaced workers or their representatives, state dislocated worker units or entities designated by the state to carry out rapid response activities, and the chief elected official of a unit of local government at least 60 days before a plant closing or mass layoff is expected to occur. Shorter notice may be provided in three instances. There are a number of other exceptions to and exemptions from the notification requirement. Relatively small businesses and small short-term layoffs are not subject to the WARN Act. Firms with 100 or more employees, excluding part-time employees, must provide advance notice. A plant closing is a shutdown of a work site that produces job losses for at least 50 employees (other than part-time employees) within any 30-day period. A mass layoff is an employment loss at a job site within any 30-day period affecting (a) 50-499 employees (excluding part-timers) if they make up at least one-third of an employer’s workforce (excluding part-timers), or (b) at least 500 employees (excluding part-time employees). Employees, their representatives, or units of local government can bring civil actions against employers thought to have violated the act. DOL does not have any investigative or enforcement authority under the law. The maximum liability of employers is back pay and benefits for each day that notice was not provided, although the amount of the penalty may be reduced.

Comments

Suggested Citation
Levine, L. (2007). The Worker Adjustment and Retraining Notification Act (WARN) (RL31250). Washington, DC: Congressional Research Service. http://digitalcommons.ilr.cornell.edu/key_workplace/485/

A more recent version of this report can be found here: http://digitalcommons.ilr.cornell.edu/key_workplace/934

Share

COinS