The WARN Act

Are you an employer, employee or receiver that’s been affected by the WARN Act? As an experienced bankruptcy and receivership law firm in Grand Rapids, Michigan, Keller & Almassian, PLC can help answer your questions, dispel any concerns and pursue action if deemed appropriate.

To understand how the law affects you and your unique situation, you must first understand what it does and who it covers. Enacted in 1988 and made effective in 1989, the WARN Act states that employers are required to give employees 60 days’ advance notice of an impending mass layoff or plant closing. In other words, if you are an employer and you’re planning to shut down operations or lay off employees – whether it’s due to financial stress or some other reason – you must warn each individual person – or their labor representative – who would be affected by this. In addition, you must send notice to the State of Michigan Workforce Transition Unit and to your local elected government official.

WARN only requires certain employers to comply, usually those with 100 or more employees. Employees who have worked less than six months in the past year or who work less than an average of 20 hours a week are not covered by this law.

If a company fails to provide proper notice as specified under WARN, then they’re at risk for civil liability. This is because an aggrieved employee can take the case to court in order to collect back pay and benefits for every day of the violation.

Receiver Exceptions

Even if the company in question is covered under WARN, there are exceptions to the rule. If they’re struggling financially, instead of filing for Chapter 11 Bankruptcy, they may have entered into a receivership. This would mean that the closings and layoffs are due to the receiver. A receiver is someone appointed to take over the company, and usually results in sale or liquidation to preserve the property.

If this is the case, then no notice is required under WARN. This is because the receiver is not the employer, and the employer is not choosing to close operation or hold mass layoffs. Instead, the government is ordering it to be done. So if you’re an employee who was just laid off and is concerned why you were not given advance notice, this may be the reason why.

Get More Information

If you’d like more information about the WARN Act or think you may have been wrongfully affected by it, contact our team at Keller & Almassian, PLC today.