What Is a WARN Notice

A WARN notice, which stands for Worker Adjustment and Retraining Notification Act, is a U.S. federal law that requires employers with 100 or more employees to provide at least 60 calendar days' advance notice of a plant closing or mass layoff. This is to give employees and their families time to prepare for potential job loss.

If you receive a WARN notice, it means that your employer is planning a significant reduction in their workforce due to circumstances such as a plant closure, a major facility relocation, or a large-scale layoff. This notice is intended to provide you with some time to make necessary arrangements, such as seeking new employment, exploring retraining options, and managing your financial situation.

If you do receive a WARN notice, it's important to carefully review the notice and consider seeking legal advice or consulting with your company's HR department to understand your rights and the available support mechanisms. Additionally, take advantage of any resources provided by your employer, such as financial advice, career counseling, or retraining opportunities.

What To Do When Employer Files A Warn Notice

If you receive a WARN notice, the most important thing you can do is carefully read and understand the content of the notice. It should provide details about the reason for the layoffs, the expected date of the layoffs, and other pertinent information. Familiarize yourself with your rights under the WARN Act. This includes knowing whether you are eligible for notice, what protections it provides, and what exceptions may apply.

Understanding your rights under the WARN Act

To be eligible for notice under the WARN Act, you generally need to be an employee who has worked for your employer for more than 6 months in the last 12 months and worked a regular schedule of 20 hours or more each week. It's important to be aware of other factors, such as how overtime is considered in determining your status as a full-time or part-time worker, and how leaves (like workers' compensation, medical, maternity, etc.) might affect your eligibility for notice.

The WARN Act requires covered employers to provide employees with a minimum of 60 calendar days' notice before a plant closing or mass layoff. This notice period is meant to give employees time to prepare for the job loss. If an employer violates the WARN Act, they may be liable to affected employees for back pay and benefits for the period of the violation, up to 60 days. Employers who fail to provide notice may be subject to civil penalties. For instance, if an employer fails to notify a local government unit, they could face a penalty of up to $500 for each day of violation.

Employers cannot require employees to waive their rights under the WARN Act. However, in certain situations, an employer may offer a severance package or other benefits in exchange for the employee's agreement not to make claims related to their job loss.

While the WARN Act provides important protections, there are exceptions that may apply. For example, if a layoff or closure is due to unforeseeable business circumstances or a faltering company, the employer might not be required to provide the full 60 days' notice.

Understand Your Benefits

By understanding the benefits available to you, you can take proactive steps to access the financial support you may need during a period of job transition. This knowledge empowers you to navigate the process effectively and ensure you receive the benefits you're entitled to.

Severance Benefits: 

If your employer offers any severance package or continuation of benefits, understand the terms and conditions. A severance package is a set of benefits provided by an employer to employees who are leaving the company due to reasons like layoffs, downsizing, or closures. It's a way for employers to assist employees during a period of job transition. Carefully read and understand the terms and conditions of the severance package. This includes details such as the amount of severance pay, how it will be paid (e.g., lump sum or installments), and any conditions you must meet to receive it. Some employers may offer to continue certain benefits for a specified period after your employment ends. These benefits might include health insurance, dental coverage, or retirement plan contributions.

In some cases, you may have room to negotiate the terms of the severance package. This could involve discussing aspects like the amount of severance pay, the duration of benefit continuation, or other terms that are important to you.

Unemployment Benefits: 

Unemployment benefits are financial payments provided to individuals who have lost their jobs through no fault of their own. These benefits are intended to help cover basic living expenses while the individual seeks new employment. Each state in the U.S. administers its own unemployment insurance program, so the benefits and procedures can vary. Start by finding the official website of the unemployment agency in your state. Understand the eligibility criteria for unemployment benefits in your state. This typically includes factors like having lost your job through no fault of your own, meeting certain wage and employment requirements, and being actively available for work.

Learn how to apply for unemployment benefits in your state. This is often done online through the state's unemployment website. Be prepared to provide information about your employment history, including previous employers and dates of employment. Be aware that there is typically a waiting period between when you apply for benefits and when you start receiving payments. This waiting period can vary by state.

Understand how the benefit amount is calculated. It's usually a percentage of your previous earnings, up to a maximum limit set by the state. Additionally, there's usually a maximum duration for receiving benefits.

Retirement Benefits: 

Identify and review any retirement accounts you have, such as a 401(k), IRA, or pension plan. Consider how the layoff might impact these accounts. For instance, if you have an employer-sponsored plan, you may want to find out if there will be changes to contributions, matching, or vesting due to the layoff.

Understand the vesting schedule of any employer-sponsored retirement plans. Vesting determines when you have full ownership of employer-contributed funds. This is important if your employer has made contributions to your retirement account.

Depending on your circumstances and the type of retirement accounts you have, you may have several options:

  1. Leave it with the Employer: If allowed, you can leave your 401(k) with your former employer. However, you won't be able to make new contributions.
  2. Roll it Over: You can roll over your employer-sponsored retirement account into an IRA or your new employer's plan, if they allow it. This can provide you with more control over your investments.
  3. Cash Out: While possible, cashing out a retirement account before retirement age can result in penalties and taxes. It's generally advised to explore other options first.

If you're uncertain about how the layoff will impact your retirement plans, it may be beneficial to consult with a financial advisor. If you’re in this situation, our financial advisors are here to help you manage your retirement savings.