The WARN Act requires businesses to give employees notice of a large-scale layoff. Who receives the notice and when can be confusing. Here are three common questions about WARN notices.

Our company is in the process of preparing to close a large business unit, but we are having trouble determining which employees to count towards the WARN Act limits.

As you know, the Federal WARN Act would apply to any employer with 100 or more employees, while the Iowa Mini-WARN applies to those with 25 or more. In general, employees who are part-time (typically working less than 20 hours a week), are in the process of retiring, resigning, or are terminated for cause are not considered to be part of the employee count for determining if a WARN Act notice is required. Other circumstances may also need to be considered, such as if you are offering a transfer to another site of employment within a reasonable commuting distance.

We are determining who will be included in a large company layoff and are likely to have WARN concerns. We haven’t identified who will be laid off. Should we simply give a blanket notice to everyone?

In many instances, a blanket notice is not considered to be effective in a situation of this type. The governing agencies typically have in the past suggested that employers try to assess who may likely be subject to layoff or termination and provide notice to that group of people even when uncertain. However, this would be an imperfect way to address the issue and could lead to unintended violations of the WARN Act. We strongly suggest you follow up with your attorney in a circumstance like this.

Can I simply pay employees instead of giving them a WARN Act notice?

Pay instead of notice is not recognized under the statute but since damages are wages and benefits for the 60-day period it could be considered a wash. The bigger issue would be the structure of the severance agreement. Like in unemployment compensation, if you get a waiver of claims or non-disparagement as a part of the severance it is no longer considered payment instead of wages - so extra WARN damages and unemployment could apply.

Bottom Line

Contact your employment attorney to go through your plan. When WARN obligations are not met, businesses face financial penalties and payment of lost wages and benefits to affected employees.