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Do companies have to warn their employees about layoffs?

On April 27, Youngstown-based Falcon Transport shut down operations without warning, leaving hundreds of employees without jobs, pay, or benefits. Many of its truckers were stranded around the country after being told to stop working immediately.  

Elk & Elk is representing affected employees in a class action to recover back pay and a variety of benefits owed to them under the WARN Act. Read on to learn more about the protections and how they help employees in these types of situations.

What is the WARN Act?

The Worker Adjustment and Retraining Notification Act (“WARN Act”) was created to protect workers. Companies with over 100 employees are required to provide written notice of a mass layoff or plant closing at least 60 days before the job losses occur.

A mass layoff is defined as loss of employment for 500 or more workers at a site, or between 50 and 499 employees if that number equals at least 33% of the company’s active workforce, during a 30-day period. A plant closing is defined as an employment site, facility, or operating unit shutdown that results in loss of employment for 50 or more workers within 30 days.

While hourly, salaried, managerial, and supervisory employees are all protected by the WARN Act, those who work less than 20 hours in an average week or have worked less than half of the past year are excluded.

Regular federal, state, and local government entities are not required to comply with the WARN Act. Some exceptions are also made for unforeseeable business circumstances, faltering companies, and natural disasters, and there are situations outside of the ones described above that could result in a WARN Act violation.

What can employees recover under the WARN Act?

Termination, layoffs exceeding 6 months, and decreases of more than 50% in an employee’s work hours during a 6-month period are all considered losses of employment. There are some exceptions to these cases – for example, employees who refuse to be transferred to another site within a reasonable commute or those employed at a temporary project or facility.

Under the WARN Act, employees who weren’t given appropriate notice of a mass layoff or plant closing are entitled to up to 60 days of certain compensation and benefits, including:

  • Unpaid wages, salary, commissions, and/or bonuses
  • Unreimbursed business expenses
  • Accrued holiday and/or vacation pay
  • Health care plan contributions deducted from the employee’s pay for medical, dental and/or vision coverage that were not put toward their intended purpose
  • Pension and 401(k) contributions
  • Other ERISA and COBRA benefits
  • Damages for breaches of fiduciary duties
  • Other compensation, benefits, unreimbursed expenses, and/or damages resulting from the mass layoff/plant closing

Not sure if you’re entitled to back pay and benefits under the WARN Act? Contact us for a free consultation to learn more about your rights.