COVID-19 & Your Business: Frequent Questions

Must we provide WARN Act notices if we are forced to close our business due to a quarantine?

Possibly. If a company is covered by the WARN Act (i.e., it has 100 or more full-time employees), it may have notice obligations if the company implements a “plant closing” or “mass layoff” in certain situations, even when the company is forced to do so for economic or other business reasons. Whether an event constitutes a plant closing or mass layoff under the WARN Act is dependent on whether the event meets the definition of a plant closing or mass layoff under the Act. Not every plant closing or mass layoff is covered.

Generally speaking, if a WARN notice is required, employers must provide at least 60 calendar days of notice prior to any covered plant closing or mass layoff. Note, however, that if employees are laid off for less than six months, then they do not suffer an employment loss and, depending on the particular circumstances, notice may not be required. Unfortunately, in situations like the one created by the Coronavirus, it is hard to know how long the layoff will occur, so providing notice is usually the best practice. WARN notices cannot be provided retroactively.

Fortunately, even in cases where the notice requirements would otherwise apply, the WARN Act provides a specific exception when layoffs occur due to unforeseeable business circumstances. This provision may apply to COVID-19. Employers should keep in mind that this exception is limited in that an employer relying upon it must still provide “as much notice as is practicable, and at that time shall give a brief statement of the basis for reducing the notification period.” In other words, once you are in a position to evaluate the immediate impact of the outbreak upon your workforce, you must then provide specific notice to “affected employees.” You must also provide a statement explaining the failure to provide more extensive notice, which in this case would obviously be tied to the unforeseeable nature of the outbreak and its aftermath. Employers should also keep in mind that some states have “mini-WARN” laws that may apply.

Last updated April 9

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