WARN Act and Workforce Reductions
100+
Employer Threshold
Employees required for WARN to apply
60
Calendar Days
Written notice required before closing
500
Mass Layoff
Or 50 to 499 if 33%+ of workforce
WARN Act Requirements
The Worker Adjustment and Retraining Notification Act requires employers with 100+ employees to provide 60 calendar days written notice before a plant closing or mass layoff. Covered employees, the state dislocated worker unit, and the chief elected official of the local government must all receive written notice.
The 'faltering company' exception applies ONLY to plant closings, not mass layoffs. An employer seeking capital to keep the business open may argue that advance notice would have prevented them from obtaining financing. But this defense is available only for closings.
Plant Closing vs Mass Layoff
the faltering company exception only applies to plant closings| Feature | Plant Closing | Mass Layoff |
|---|---|---|
| Definition | 50+ employees lose jobs at a single site | 500+ employees laid off OR 50 to 499 if 33%+ of workforce |
| Notice Required | 60 calendar days | 60 calendar days |
| Employer Threshold | 100+ employees | 100+ employees |
| Faltering Company Exception | Yes, applies | No, does NOT apply |
The Three Exceptions
memorize which exception applies whereFaltering Company
Plant closings ONLYEmployer actively seeking capital or business. Giving notice would jeopardize the effort.
Unforeseeable Business Circumstances
Both closings and layoffsA sudden, unexpected event outside the employer control (major client pulls contract, market collapse).
Natural Disaster
Both closings and layoffsEarthquake, flood, drought, storm, or similar natural disaster directly causes the closing or layoff.
can you spot the faltering company trap?
Practice WARN Act scenarios covering thresholds, exceptions, and timelines
Practice WARN QuestionsExam Traps
The 100 threshold includes part-time for headcount but not for mass layoff math
To determine if an employer has 100+ employees (the WARN threshold), part-time workers count toward the headcount. However, when calculating whether a mass layoff has occurred, the 50-499 employees affected must be full-time. Part-time workers do not count toward the 33% calculation. The exam tests this nuance.
The faltering company exception applies ONLY to plant closings
An employer actively seeking capital or business to stay open may use the "faltering company" exception to provide less than 60 days notice. But this exception applies only to plant closings, never to mass layoffs. The exam will present a layoff scenario and offer the faltering company defense as a wrong answer.
60 calendar days, not business days
The WARN Act requires 60 calendar days of written notice, not 60 business days. Weekends and holidays count. An employer who gives 60 business days of notice (roughly 84 calendar days) has complied, but one who gives 60 calendar days thinking they mean business days has not given enough if they only counted workdays.
60 Calendar Days
Calendar days. Not business days. Not working days. Every day on the calendar counts toward the 60.
Three Exceptions
Unforeseeable business circumstances. Faltering company (closings only). Natural disaster. Everything else requires the full 60 days.
WARN is like requiring a 60-day advance fire alarm. If the building is going to close or a large section will be evacuated, the landlord must sound the alarm 60 days before it happens so tenants can make other arrangements.
The alarm requirement only applies to buildings with 100+ tenants. Smaller buildings are exempt. This is the employer size threshold.
The alarm sounds for two reasons. A plant closing (50+ tenants lose their space at one location). A mass layoff (500+ tenants affected, or 50 to 499 if they represent more than a third of all tenants).
If a genuine earthquake strikes (natural disaster), if an unexpected tenant emergency makes closure unavoidable (unforeseeable circumstances), or if the landlord is actively negotiating financing to save the building (faltering company, closings only), less notice may be acceptable.
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