One of the biggest misconceptions you can hold as a business owner is that only negligent or careless companies face liability issues. For instance, you may feel insulated from certain issues, such as employee embezzlement and discrimination, because you’ve implemented documented systems, policies, and procedures to prevent it. However, how confident are you that you would get a solid response if you asked an entrepreneur what the WARN Act is? Although the WARN Act is a federal law, sixteen states have implemented mini-WARN Acts. Does your state have one?
Who Does the WARN Act Cover?
Because we are a Florida-based firm, we want to clarify that our state does not currently have a mini-WARN Act. The WARN Act is the Worker Adjustment and Retraining Notification Act. It centers around how and when to notify employees of mass layoffs and plant closures. The WARN Act requires employers to give their employees at least 60 days' notice of a mass layoff or closure to allow the worker to adjust so they can provide for themselves and their families. Not only does the employer have to notify employees (or their union representative), but they also have to contact the State Rapid Response Coordinator and the local government official based on where the business is located.
This applies to companies with 100 or more employees, but exceptions exist. For instance, employees who work less than 20 hours per week or have worked less than six months of the last twelve do not count toward your total number of employees. Regarding plant closings, the number of employees drops from 50 if the plant is closed for any 30-day period.
Previously we mentioned that the WARN Act pertained to mass layoffs too, and we must identify what one is. A mass layoff does not have to be a plant closing. Something is considered a mass layoff when 500 or more employees lose their jobs for more than 30 days. However, laying off fewer than 500 people could still constitute a mass layoff if the number falls between 50-499 and those people make up at least 33% of the workforce.
The 90-Day Aggregation Rule
To explain the 90-day aggregation rule, we will use the following example:
- A company has 300 full-time employees that have worked all 12 of the previous 12 months.
- They lay off 30 employees on January 1st.
- They lay off an additional 40 employees on February 1st.
- They lay off 30 more employees on February 25th.
The 90-day aggregate rule applies when at least two rounds of layoffs occur over a 90-day period. Although each round was less than 50 employees, the total number of employment losses exceeded 50, and it was more than 33% of their total employees.
Protect Your Business with Cueto Law Group, P.L.
The WARN Act is more robust and has more details than we could go over here. There are also times when a sudden or unexpected event causes mass layoffs, and you will not be able to give appropriate notice. Our firm will work closely with you to ensure you are compliant regardless of your circumstances. Contact Cueto Law Group to schedule your consultation today.
