WARN Act

Which employers are covered

Federal WARN applies to employers with either 100 or more employees, not counting part-time employees, or 100 or more employees, including part-time employees, who together work at least 4,000 hours a week, not counting overtime.

Part-time here has a specific meaning: an employee who averages fewer than 20 hours a week, or who has worked fewer than 6 of the 12 months before the notice date. That second part catches recent hires. A contact center that just onboarded a 120-person class can have fewer full-time employees for WARN purposes than its headcount suggests, which changes the math on whether a layoff triggers notice.

The law covers private for-profit and nonprofit employers and public and quasi-public entities that operate commercially and separately from government. Regular federal, state and local government entities are not covered.

What triggers WARN notice

Notice is required for two events.

Plant closing: the permanent or temporary shutdown of a single site, or of one or more facilities or operating units within a single site, that causes an employment loss for 50 or more employees (excluding part-time) during any 30-day period.

Mass layoff: a reduction in force that is not a plant closing and causes employment loss at a single site during any 30-day period for:

• 500 or more employees (excluding part-time), or
• 50 to 499 employees (excluding part-time) if they make up at least 33% of the active workforce at that site.

Employment loss means a termination other than a discharge for cause, a voluntary departure or a retirement; a layoff that exceeds six months; or a reduction in hours of more than 50% in each month of any six-month period.

Two rules make this harder than it looks:

• Aggregation. Employment losses at a single site over a 90-day period can be added together if each group alone falls under the threshold, unless the employer shows they come from separate and distinct causes. Rolling cuts of 30 people every few weeks can add up to a covered event.
• Single site. A campus of buildings close together can be one site. Remote employees are generally assigned to the site they report to or receive work from.

For a reduction in force at a 140-person site, cutting 46 people is 33% but under 50, so federal WARN does not apply. Cutting 50 is 36% and does. Three cuts of 20 within 90 days would also be aggregated into 60 unless each had a separate cause.

Who gets notice and what it must say

Written notice must go, at least 60 calendar days before the first separation, to:

• Each affected employee, or their union representative if they are represented.
• The state's dislocated worker unit (rapid response).
• The chief elected official of the local government where the site is located.

The content differs by recipient. Notice to non-union employees has to be written in plain language and include whether the action is expected to be permanent or temporary, whether the whole facility is closing, the expected separation date or a 14-day window, information on bumping rights if any, and a contact for more information. Notice to the state and local government needs more detail, including job titles and the number of affected employees in each.

Employers can provide pay and benefits in lieu of notice, which is why many companies do a layoff with 60 days of paid non-working notice. The employee stays on payroll, keeps benefits and is relieved of duties, and the WARN obligation is met.

Exceptions and penalties

The law allows shorter notice in limited cases, though the employer must still give as much notice as practicable and explain why notice was shortened:

• Faltering company (plant closings only): the employer was actively seeking capital or new business that would have avoided the closing, and believed in good faith that giving notice would have stopped it from getting that money or business.
• Unforeseeable business circumstances: a sudden, dramatic event outside the employer's control, such as the unexpected loss of a major client contract. For BPOs and staffing firms, contract terminations are the common scenario, and the employer needs evidence the loss was truly sudden.
• Natural disaster: floods, earthquakes, storms and similar events.

Notice is not required at all for the closing of a temporary facility or completion of a project when employees were hired with the understanding that their work was limited to it, or for strikes and lockouts.

An employer that violates WARN owes each affected employee back pay and benefits for each day of violation, up to 60 days. It can also face a civil penalty of up to $500 a day payable to the local government, which it avoids by paying employees what they are owed within three weeks of the layoff. Courts can award attorney's fees. In practice, WARN claims are almost always filed as class actions.

State mini-WARN laws

Many states have their own laws with lower thresholds, longer notice periods or additional requirements. A few that come up often:

• California: covers establishments with 75 or more employees in the prior 12 months and requires 60 days' notice for a layoff of 50 or more employees within 30 days, regardless of the percentage of the workforce. It also covers relocations of 100 miles or more.
• New York: covers employers with 50 or more full-time employees in the state and requires 90 days' notice, with lower thresholds for layoffs and closings.
• New Jersey: amended in 2023 to require 90 days' notice for terminations of 50 or more employees at or reporting to New Jersey sites, and mandatory severance pay of one week per full year of service, with four extra weeks if notice is short.
• Illinois: covers employers with 75 or more employees and requires 60 days' notice, with lower triggers than federal law.

Others include Hawaii, Iowa, Maine, Tennessee, Wisconsin and Washington, with more added in recent years. For any significant reduction, check every state where affected employees work, including remote staff. This summary is not a substitute for legal review of a specific layoff.

Practical WARN planning for HR

Run the WARN analysis before the business decision is final, not after. Practical steps:

1. Pull headcount by site with hire dates and average weekly hours to apply the part-time exclusions correctly.
2. Map every planned separation, including layoffs, closings and hours reductions, over a 90-day window before and after the event.
3. Check federal and state thresholds for each site and each state.
4. Decide whether to give working notice or pay in lieu, and budget for benefits continuation through the notice period.
5. Draft employee, union, state and local notices and serve them on the same day.
6. Coordinate with benefits on COBRA notices, final paychecks, offboarding and any outplacement support.

The common mistakes are forgetting aggregation, miscounting recent hires as full-time, assuming remote employees do not count, and treating a client contract loss as automatically unforeseeable.