The aftermath of the COVID-19 pandemic is making employer compliance with some federal laws, such as the Worker Adjustment and Retraining Notification (WARN) Act, more complicated. In addition, the rise of the remote workforce also is making compliance more difficult. Court ruling and changes in state laws are contributing to these ongoing issues concerning the WARN Act. 

The WARN Act is a federal law that requires employers who employ one hundred or more full-time workers to provide written notice at least 60 days before closing a plant or operating unit that affects at least fifty employees at one worksite. The law also requires employers conducting a mass layoff to give the same notice to employees unless it is the direct result of a natural disaster or unforeseeable business circumstances. A mass layoff occurs when a company lays off five hundred or more workers at one worksite within 30 days, or fewer workers if that number makes up one-third of the employer’s total workforce at one work site. 

The WARN Act does not cover mass layoffs that last for less than six months. The law also does not apply to part-time workers, workers who retire, resign, or are terminated for just cause, or workers whom the employer offers a transfer to another work site. 

Fifth Circuit Rules that Pandemic Does Not Excuse WARN ACT Violations

The U.S. Court of Appeals for the Fifth Circuit recently ruled in Easom v. US Well Services that the COVID-19 pandemic is not a natural disaster that would justify employers failing to give employees adequate warning of mass layoffs. This class action suit arose after the company laid off workers in 2020 without first giving them 60 days’ notice as required by the WARN Act. In this case, the court ruled that the employer failed to prove that the COVID-19 pandemic was a natural disaster within the meaning of the WARN Act, as Congress did not include words such as “disease,” “pandemic,” or “virus,” in the statute. 

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.

State WARN Act Updates

New Jersey amended its state WARN Act in 2020, but it has put the effective date of the amendments on hold due to the pandemic. That state law will apply to all employers who have at least one hundred employees, no matter if they are full-time or part-time. It also will cover mass layoff of fifty or more employees. The New Jersey WARN Act will require a 90-day notice to workers before a covered employer can conduct a mass layoff. All employees will receive one week of severance pay per year of service and four additional weeks of severance pay if the employer fails to give the requisite 90-day notice. The state also explicitly states that covered employers are not required to pay workers any severance after a mass layoff if it occurs due to the COVID-19 pandemic. 

Other states also have WARN laws, which often have stricter requirements than the federal law. For example, unlike the New Jersey WARN Act, the Hawaii and Maine laws do not require employers to pay any severance. In addition, some states have made WARN laws easier to trigger, and others are adding enforcement mechanisms they previously did not contain. 

Remote Workers and Workers Who Travel

Many companies now employ remote workers. Other companies utilize workers who travel extensively, like truck drivers. Employers should be sure to count those workers as part of their workforce for purposes of the WARN Act. These workers are part of the worksite from which they receive work assignments or where they report. 

A federal district court in Virginia recently granted class certification to a group of remote workers alleging their employer violated the WARN Act when it failed to give them 60 days’ notice before laying them off in 2019. The remote workers reported to and received work assignments from a business unit in Virginia. The case is Piron v. General Dynamics Information Technologies

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.

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