ANALYSIS: As Layoffs Rise, Employers Must Heed State WARN Laws (1)

As some companies consider reductions in force amid uncertain economic conditions, employers need to prioritize compliance with state laws governing mass layoffs and plant closings, which provide regulations on top of the federal WARN Act.

The WARN Act requires employers with 100 or more employees to provide employees with 60 days of paid notice if they conduct a qualifying mass layoff (typically of 500 or more employees) or plant closing. Failing to comply can result in expensive litigation and can leave employers on the hook for lost wages, daily penalties, and attorneys’ fees.

In addition to the federal mandates, numerous states have their own rules governing mass layoffs and plant closings, and employers who aren’t cautious could face consequences under state laws, even if they comply with federal law.

For example, some states have their own “mini-WARN” laws covering circumstances broader than what’s covered under federal law, such as smaller employers and layoffs. California’s law encompasses facilities with as few as 75 employees and layoffs of 50 or more, while Wisconsin’s law applies to employers with as few as 50 employees and layoffs of 25 or more.

State mini-WARN laws may also impose requirements like longer notice periods or heightened reporting. For instance, New York requires covered employers to provide at least 90 days’ notice before a qualifying layoff or plant closing. The notice period in New Jersey’s mini-WARN law has been increased from 60 days to 90 days, but that change has not yet taken effect.

Other states have regulations that aren’t as extensive, but still provide some requirements or recommendations beyond federal law. Connecticut requires employers to pay employees’ group health insurance for 120 days after a qualifying event. Michigan and Minnesota laws both encourage, but don’t require, all employers to give as much notice as possible when considering any mass layoffs or plant closures.

The remaining states don’t have laws analogous to the WARN Act. However, all employers must still abide by federal law, regardless of whether they’re subject to any additional state regulation.

(Updated with links to state laws in fourth, fifth, and sixth paragraph. A previous version corrected the status of New Jersey’s 90-day notice requirement in the fifth paragraph.)

Bloomberg Law subscribers can find related content, including our Chart Builder on Plant Closings and Mass Layoffs, in our Labor & Employment Practice Center.

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