See Also: Your Business’s Response to COVID-19

The Worker Adjustment and Retraining Notification (WARN) Act, passed by Congress in 1988, was established to provide workers with time to prepare for an impending closing or mass layoff. It’s imperative for employers to review the WARN Act, especially if considering plant closings or massive layoffs due to the coronavirus state and federal mandates.

How will the WARN Act affect businesses if there is a government-ordered shutdown due to COVID-19?

Businesses who have either been forced to let go of workers or are considering it should take heed of federal and state laws that require a 60-day notice to employees before a mass layoff or plant closing.

Major Penalties

The WARN Act could result in stiff fines for employers with 100 or more employees who let more than 50 workers go. But some exceptions are relevant to the novel coronavirus situation, including such layoffs caused by a business circumstance that was not “reasonably foreseeable as of the time that notice would have been required,” or no notice is required if such is due to any form of “natural disaster.”

The COVID-19 situation seems to us to be a “natural disaster” and not a “reasonably foreseeable” event, but we cannot be certain a Court or government agency will agree with that assessment.

An employer relying on the reduction of notice “shall give as much notice as is practicable” and at that time shall give a brief statement of the basis for reducing the notification period.

So, this notice should be done sooner rather than later.

Please do not hesitate to contact us if you have any questions regarding the WARN Act or any other aspect of your business. We’re here to help!

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Debra Nelson is an attorney in the firm of Henningson & Snoxell, Ltd. located in Maple Grove, Minnesota, practicing in the firm’s Business Law, Employment Law, and Commercial Real Estate Departments. Debra understands her clients’ business, strategic goals, and plans. She works with each client to develop and grow their business with mergers and acquisitions, help plan for succession, and assist with preserving wealth for future generations.