Clarifying WARN Act Obligations

Do you have over 50 employees?

Did your business experience one of the following as a result of COVID-19?

1. Closing affecting 25 of more workers
2. Mass layoff involving 25 or more full-time workers (if those 25 make up at least 33% of the total workers at the site)
3. Mass layoff involving 250 of more full-time workers

If so, you are probably subject to the WARN Act.

The WARN Act requires New York businesses with over 50 employees to give early warning of closures and layoffs to (1) affected employees, (2) representatives of the effected employees, (3) the NYS DOL and (4) the local Workforce Investment Board.

Let's keep this simple:

In the scramble of your mid-March closure, you overlooked your WARN obligations. Or you assumed that your layoffs would be temporary (under 6 months). Either way, we recommend revisiting WARN in partnership with HR and legal counsel to ensure you meet the notification requirements.

Why now?

In a few days, it will have been six months since the original New York City shutdown, and the accompanying layoffs and furloughs. Under WARN, six months is the milestone when temporary layoffs become permanent employment loss (read WARN Regulations 921-3.1).

As preposterous as it is to think of liabilities arising from the last six months’ chaos, there are wage & hour liabilities and civic penalties for failing to meet the WARN requirements. The Act provides for a civil penalty of $500 per day of violation, and employers are also liable for back pay and other benefits for 60 days of the violation. 

Read more from our partners at the NYC Hospitality Alliance here, and email us at [email protected] for more information.