A commenter pointed out that some taxes are not paid directly to the local government but are paid as a surcharge on a State tax and are collected by the State. Specifically, it was suggested that the regulations should discuss the "buy-out" provisions of sections 5(a) (2) and (3), which provide that an employer may reduce its monetary liability for violations of WARN by the amounts of certain payments made to or on behalf of the affected workers. (4) Section 639.3 Definitions The last point is particularly important. The regulation also discusses some examples of what do and do not constitute temporary projects. The latter interpretation is more consistent with what is probably the more common situation, in which substantial reductions in hours occur, where the reductions are not planned 6 months in advance, but happen incrementally because of changing conditions, for example, a reduction in cash flow that extends for many months. DOL believes that the remaining elements of notice are important if the parties are to receive notice which will provide them with the information they need to take the appropriate actions to minimize the effects of the affected employees' employment loss. Day 2-Company terminates 30 employees (now 150 employees); The commenters argued that WARN does not require a specific form of notice and that only simple notice is required under the Act; that the requirements can create other grounds for suit for technical violations of the requirements; that the requirements will discourage employers from providing longer notice and from voluntary compliance. These commenters suggested that the final regulations should adopt a definition of the effective date provision of section 11 of WARN that requires notice to begin to be given on the February 4, 1989 effective date of WARN for plant closings or mass layoffs that occur on April 5, 1989. Thus, conditional notice is permitted only if there is a definite event, like the renewal of a major contract, the consequences of the occurrence or non-occurrence of which will definitely lead to a covered plant closing or mass layoff less than 60 days after the event. While the Department agrees that a broad definition of the terms is appropriate in light of the intent of WARN to focus on actual losses of employment, the commenter's proposal cannot be accepted since it would give no meaning to the words "relocation or consolidation". DOL believes that the approach it has adopted is most consistent with Congressional intent in two important respects. Ford); see also H.R. (f) Section 639.1(f) Coordination With Job Placement and Retraining Programs This language, particularly the use of the words "results in", contemplates that both employment losses of the employees who work in the facility(s) or operating unit(s) and those who lose their jobs as the direct result of the shutdown(s) are to be counted in determining when a plant closing has occurred. (12) Effective Date While specific mention of the contract of sale has been deleted in the final regulations, since the parties to a transaction may utilize other methods to allocate WARN responsibility, DOL continues to suggest that prudent employers make provisions for WARN notice, if applicable, in the contract of sale or elsewhere. These matters have been left solely to the courts to decide. In the final regulations prescribing notice to affected employees, the requirement that the notice state the name and address of the plant has been eliminated and a requirement that the employer provide the name and telephone number of a company contact person has been added. Analysis of Final Rule and Comments The concept is not a new one in the law; there is a developed body of law under such statutes as the NLRA, Title VII of the 1964 Civil Rights Act and the Age Discrimination in Employment Act. The job titles of the positions to be eliminated and the names of the workers holding those positions (or the numbers of workers for the State dislocated worker unit and the local government) enable unions and service providers to quickly identify the workers who will be affected and the size and scope of the action and the services needed to respond to it. In terms of the specific issues raised in the comments, the Department agrees that incentive programs, including incentive retirement programs and voluntary layoffs, that meet the definition of voluntariness outlined above, are voluntary departures for purposes of WARN. #block-googletagmanagerfooter .field { padding-bottom:0 !important; } The Department notes an important difference between the closings discussed above and the absolute closing of a savings and loan institution by the FHLBB. (134 CONG. In the final regulations, the definition of lockout has been modified to cover defensive lockouts that occur during labor disputes. A layoff extending beyond 6 months for any other reason is treated as an employment loss from the date of its commencement. None of the comments discussed this provision and it remains unchanged in the final regulations. One commenter suggested that in the trucking industry, lines of progression would constitute operating units, i.e., over-the-road drivers, mechanics and clericals would each be in separate operating units. Another commenter asked that it be made clear that the examples in the regulation are not inclusive. The Department also recognizes that certain of the provisions of WARN involves subjects which are typically covered in collective bargaining agreements. Notice that is given based on what has happened over the past 6 months may be too late. This discussion has been revised to make it clear that the provision preserves notice rights, but creates no other employment rights and that the technical termination that may be deemed to occur upon the consummation of the sale does not, in itself, create notice rights. The final regulations have been revised to make it clear that the exemption does not apply to the effects of strikes or lockouts at plants other than those at which the strike or lockout actually is occurring and to make it clear that the unforeeable business circumstances exception to the 60-day notice requirement may be applicable to these direct and indirect effects and to layoffs at the struck plant. Further, "seasonal" employees who work 6 months or more may also fall under the "limited employment" exemption. This section defines "employment loss" and exclusions from employment loss when certain transfers occur. The Worker Adjustment and Retraining Notification Act of 1988 (the "WARN Act") is a US labor law which protects employees, their families, and communities by requiring most employers with 100 or more employees to provide 60 calendar-day advance notification of plant closings and mass layoffs of employees, as defined in the Act. Two commenters were concerned that the discussion of geographically separate but operationally connected sites in §639.3(i)(2) could be read broadly to cover separate sites which occasionally share staff or which are supplied from a common source. Section 8(a) of the Act requires that the Secretary of Labor "prescribe such regulations as may be necessary to carry out this Act. This section discusses the desirability of giving notice in situations where questions may arise about the applicability of WARN. 1205-0276, expiring December 31, 1990. The purpose of the WARN Act is to give workers and their families some transition time to prepare for the prospective loss of employment, to seek a new job, and, if necessary, to seek training in a new skill or retraining in an existing skill that will allow the workers to obtain replacement work. The final regulation has been revised to make it clear that the employer must show that it communicated to its employees the temporary nature of the project or facility. DOL believes that the language of the exception conveys this narrow reading. The Department's view is that an employer who announced at the outset that a layoff would be for 6 months or less, who did not provide advance notice under WARN and who plans to extend the layoff beyond 6 months may violate the Act unless: (i) The extension is due to business circumstances (including unforeseeable changes in price or cost) not reasonably foreseeable at the time of the initial layoff; and (ii) notice is given when it becomes reasonably foreseeable that the extension is required. (b) Section 639.5(b) Transfers Another commenter suggested that employees who are offered transfers to another employment site and who refuse those offers should be considered to have voluntarily quit. The Department believes that the best remedy for the problem is to permit contingent notice to cover these cases. The Department thinks that overtime hours or hours in addition to the normal and customary hours of the worker should not be counted in determining the base hours of work. H2370 (daily ed. The Department agrees and has so revised the final regulation. While the Act does not enumerate specific elements which should be included in the advance written notice of an order for a plant closing or a mass layoff, the purpose of providing notice to the parties mentioned in the Act is to allow each of them to take appropriate action to facilitate training, employment or other adjustments for affected employees. Worker Adjustment and Retraining Notification (WARN) Worker Adjustment and Retraining Notification (WARN) The WARN Act is a federal law requiring employers of 100 or more full-time workers to give 60-days advance notice of a plant closing or mass layoff. Similarly, establishing a rule of thumb that transfers within a metropolitan area are always within a reasonable commuting distance is inappropriate, although such transfers will usually meet the definition. The paragraph also states that if one of the exceptions is invoked, the employer must still give as much notice as is practicable, and must give notice containing a brief statement of the reason of the reason for giving less than 60 day's notice and the elements of notice required in §639.7. Since WARN and the regulation focus on receipt of the notice and since the time it will take for mailed notice to be received will vary with local conditions and with the location of the recipient, DOL does not believe that any additional rule for when notice is deemed served is appropriate. The Department solicited comments on issues related to strikes and lockouts. This provision provides a definition of the term "employer". The FHLBB suggested that these employees should be covered under the temporary projects exemption. The Department agrees that this change more closely conforms to the statutory language and has added the phrase. If an employee who has available bumping or seniority rights refuses to exercise those rights and quits or resigns instead, that employee has voluntarily quit, has not suffered an employment loss and is not entitled to notice. DOL does not, however, agree that a worker who, after the announcement of a plant closing or mass layoff, decides to leave early has necessarily been constructively discharged or quit "involuntarily". While these two commenters are apparently seeking different results in terms of how operating units would be defined in practice, there appears to be little difference in the definitions they present and DOL agrees with both commenters that only distinct structural or operational entities within a single site of employment are intended to be included as operating units. The intent of the regulatory provision relating to independent contractors and subsidiaries is not to create a special definition of these terms for WARN purposes; the definition is intended only to summarize existing law that has developed under State Corporations laws and such statutes as the NLRA, the Fair Labor Standards Act (FLSA) and the Employee Retirement Income Security Act (ERISA). The "snapshot" test is simply to look at the employer's employment levels on the date notice is due to be given. The revised definition reads: "an organizationally or operationally distinct product, operation or specific work function". The provisions of the Workers Adjustment and Retraining Notification Act are introduced to protect workers who will suffer a loss of employment as a result of a mass layoff or a company closing. On September 16, 1988, the Department published a notice in the Federal Register inviting comments from interested parties regarding: "(1) The extent to which the Department should issue interpretive regulations; and (2) To the extent that regulations are needed, the specific views of commenters on how particular sections of the law should be implemented through regulations.". For example, the definition of the term "operating unit" depends on the organizational and functional structure of each plant, a matter often covered under seniority or other provisions of collective bargaining agreements. The Department disagrees, however, that the mere closing of a plant for hours when it was previously open constitutes the closing of an operating unit. DOL received 62 comment letters in response to the October 28 Discussion Paper from employer associations, employers, labor unions, law firms, a State governmental agency, four members of Congress who were legislative sponsors, and another member of Congress. If a third layoff affecting 60 employees occurs on April 20, these employees also are entitled to notice since their employment losses fall within a second 30-day period which includes the March 30 layoffs. That language was adopted because of the use of the term "equivalent position" in the Senate Report on S. 538. 29 U.S.C. (g) Section 639.1(g) WARN Not to Supersede Other Laws and Contracts Rep. 100-576, 100th Cong., 2nd Sess., 1046 (April 20, 1988)). While setting a "rule of thumb" has some appeal, DOL has decided not to do so because any such role could be inappropriate in a large number of situations and may cause more confusion than it eliminates. Other commenters objected to the requirement that after the fact notice be given when a natural disaster causes a plant closing or mass layoff. This provision drew a number of comments. It must be noted that the ability to reassign workers is not without limits. This section discusses the basic WARN rule that notice must be given 60 days in advance of a planned plant closing or mass layoff. A commenter suggested that service on the Governor should be sufficient service on the State dislocated worker unit and that DOL should publish a list of State dislocated worker units. WARN Section 2(a)(2) and (3) say nothing about cause. Thus, at all times one of the parties to the transaction is responsible for giving notice. One commenter suggested that the regulation should permit the employer to rely on a written acknowledgment from the worker that the commuting distance is reasonable. The Department believes that in the unique WARN enforcement scheme, under which all enforcement will occur in the context of private civil lawsuits, it is inappropriate for the Department to regulate with respect to these issues. Several commenters objected to the inclusion of the phrase "in the normal course of collective bargaining" in the regulation, arguing that it could be construed to exclude sympathy or wildcat strikes from the coverage of the exemption. Several commenters expressed concerns that the definition of single site of employment could be read either too broadly or too narrowly. A number of commenters questioned the use of the term "full employment status" in section 639.3(f)(2). This section discusses the exemption from notice in section 4(a)(1) of WARN. Sign up for Employment Law Handbook’s free email updates to stay informed. 2101 et seq. As the same commenter stressed repeatedly in other comments, it is often difficult to predict 65 days in advance exactly how many employment losses will actually occur. They suggested that an exception for government ordered closings be included in the regulations. WARN contains no provisions imposing any notice obligations on unions. DOL is persuaded that there are factors, including the difficulty of predicting a bumping path where employees have several options among positions or lines of progression into which they can bump, which make it difficult to predict who will finally be affected as a result of a plant closing or mass layoff. Thus, any interpretation that might be adopted possibly could mislead employers to their detriment. The temporary projects exemption applies to the nature of the project, not to the length of the notice given when it is terminated. Assuming there has been an announcement that a layoff of 6 months or less has been ordered, this is a correct statement since the definition of employment loss excludes layoffs of 6 months or less. This section provides that any reasonable method of serving notice is acceptable, as long as the intended recipient has the notice in hand 60 days before the separation occurs. The commenter argued that the employer's workforce should be determined before notice is due to be given. On the specific elements of notice, the commenters were particularly opposed to any requirement that a specific date be given, claiming that employers cannot anticipate a specific date when a layoff will take place 60 or more days in advance. The final regulations provide that notice is required to be given to employees who may reasonably be expected to experience an employment loss, including those workers who lose their jobs because of bumping rights and other factors, to the extent that they can be identified at the time notice is required to be given. Similarly, WARN provides that a worker does not experience an employment loss if the employer offers to transfer the worker to a job at a different site within a reasonable commuting distance. Given the concern expressed in the Conference Report on H.R. If a collective bargaining agreement includes provisions for transfers and stipulates what constitutes reasonable commuting distance, that definition should control; it is the parties' agreement on the meaning of the term in the local conditions. Because this language is so closely tied to another law, administered by another agency having expertise in this area, DOL has chosen not to attempt any extensive regulatory explanation of this provision. A commenter suggested that the regulations should be clear that the number by which to measure whether the plant closing or mass layoff threshold has been met is the number of employment losses that actually occur, if that number is less than the number of positions eliminated. A commenter asked that the regulation be clarified as to the construction industry to acknowledge that the completion of a project may result in a layoff from a job but not a separation from the industry. General Provisions. Before sharing sensitive information, make sure you’re on a federal government site. This exception requires that an employer must have been actively seeking capital or business at the time 60-day notice was due to be given, that there must have been a realistic chance to obtain the capital or business; that if the capital or business were obtained it would have been sufficient to keep the business operating for a reasonable period of time; and that the employer must have believed in good faith that giving notice 60 days in advance would have precluded the employer from obtaining the needed capital or business. This section provides a brief overview of the WARN notice scheme. DOL does not believe that industry-specific exemptions from WARN notice requirements are appropriate or justified. SUMMARY: The Employment and Training Administration of the Department of Labor is publishing a final regulation carrying out the provisions of the Worker Adjustment and Retraining Notification Act (WARN). REC. (6) Since the union alone decides to strike, it makes no sense that Congress intended to cover this situation; also, it would require notice to the union that initiated the strike. In this situation, the layoff is not automatically deemed an employment loss. Nonetheless, that point can be made without reference to the duration of the contract and the final regulation has been revised to eliminate the reference. In the case discussed above, the employer remains in control of its business. The definition of the term "reasonable commuting distance" is a flexible one intended to take local conditions into consideration. There may well be cases in which workers performing different jobs as a part of a larger operation may be sufficiently organizationally or operationally distinct to be defined as a separate operating unit.). (a) Section 639.6(a) Notice to Representatives of Affected Employees Because other agencies with responsibility to administer these statutes regularly are involved in these areas, the regulations will not address the issue. Other commenters disagreed that all warehouse and stock workers would necessarily constitute an operating unit. DOL agrees with the comment, but believes that the proposition state is axiomatic in the WARN scheme; an employer is only responsible for giving notice to its employees for covered employment losses that occur as a result of its actions. Language to this effect has been added to the regulation. The final regulations provide that such minor errors should not be the basis for liability. One commenter suggested that since WARN section 3(b)(3) merely requires the employer to give a brief statement of the reasons for giving less than 60 days' notice, the regulations should follow the burden of proof model of Title VII of the Civil Rights Act and impose the burden on the challenging party to prove that the claim of exception was a pretext if the employer proffers a sworn statement as part of the notice process. Most of the comments discuss collectively bargained seniority systems under which the identification problems suggested in the comments will not arise since employers are required only to notify the affected unions and to provide them with information about the positions affected and the incumbents in those positions, not about the ultimate "bumpees". 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