Are you looking to layoff employees in Illinois? You will need to make sure that you are compliant with the WARN (Workers Adjustment and Retraining) Act and other regulations within your area in Illinois.
To make sure that you are compliant, you will need to understand multiple areas of these laws. First, let’s break down the different parts of the WARN Act that you will need to understand when laying off employees in Illinois:
1. You first need to understand if your layoff event is covered by the federal WARN Act
2. How to be compliant with the state WARN Act requirements in Illinois
Before we dig into these two areas of this regulation, make sure to download our WARN Act checklist with the button below:
Now, let’s get started with understanding if your layoff event is covered by the WARN Act:
Federal WARN Act Qualifications in Illinois
The WARN Act has several regulations that shape who the law should be applied to. It states:
- The WARN Act applies to your organization if you have over 100 full-time employees
- The WARN Act applies to all publicly and privately held companies
- The WARN Act applies to all organizations that are for-profit or not-for-profit
- A WARN notice must be given if there is a plant closing or a mass layoff
So, if you are an organization that has less than 100 full-time employees (FTEs), you do not have to comply with the WARN Act. If you have over 100 full time employees, the WARN Act will apply to you regardless of being public or private, for-profit or not-for-profit.
Those regulations are fairly simple to understand. The last one: “A WARN notice must be given if there is a plant closing or a mass layoff”, is a little bit more complicated because of the ambiguity of a “mass layoff” or “plant closing”.
According to LexisNexis, a plant closing is:
“If one or more facilities or operating units in a given location anticipate a shutdown that will affect more than 50 workers AND last more than 30 days.”
And a mass layoff is:
“If a series of layoffs over a 30 day period will result in the loss of 500 or more employees, WARN Act Notice must be given. Also, if a series of layoffs of more than 50 or less than 500 employees over a 30 day period will result in a loss of 1/3rd of the workforce, WARN notice must be given.”
You can read more about these qualifications in our blog “When and How Does the WARN Act Apply To Your Organization?”
Now, let’s run through a couple of examples:
1. A manufacturing company in Chicago, Illinois has 45 employees. The organization is laying off over half of its employees due to the loss of a business contract.
Since the company has less than 100 employees, it does not have to give a WARN notice.
2. A non-profit organization with over 500 employees will be closing down an office in St. Louis, Illinois resulting in 134 employees being permanently laid off.
Since the company has more than 100 employees, and the facility that is closing will affect more than 50 employees for more than 30 days, giving a WARN notice is required.
Makes sense, right?
Now let’s dig into how Illinoisan companies should comply with the federal WARN Act if their reduction event qualifies.
How To Comply With The Federal WARN Act in Illinois
To comply with the WARN Act, you will need to let your affected employees know 60 days in advance of their last day with the organization. This can be done through several different delivery methods, as long as it is given in writing. The United States Department of Labor states that any reasonable method of delivery is applicable. However, according to the United States Department of Labor:
“Use of pre-printed notices that are regularly included in employees' paychecks or pay envelopes are not acceptable and do not meet the WARN Act requirements.”
This means that if your organization regularly gives out notices about the workplace with your paychecks, providing a WARN notice this way isn’t sufficient. This is because your employees might not notice the notice since they are regularly given notices through this delivery method.
When creating your WARN notice to be given to employees, make sure to include the following items:
- Notify notice receivers of the upcoming reduction in force
- Explain whether this layoff will be permanent or if the workers can expect to be called to work again
- A time-frame of when layoffs will occur and when their position will be affected
- Your organization’s policy on bumping rights
- Severance benefits that your organization will provide
- Who the employees should contact for further information at your organization (usually an HR representative)
To comply with the WARN Act, your organization must also provide a notice to your government about your reduction event. Similar to the notice given to employees, this notice must be given 60 days in advance.
According to the US Department of Labor, “the employer must also provide notice to the State dislocated worker unit and to the chief elected official of the unit of local government in which the employment site is located.”
Illinois Laws Impacting Your Layoffs
Unlike other states, Illinois also has specific state laws about layoffs that your organization will have to follow.
This means that if you are laying off employees in Illinois, you will also need knowledge of these state regulations. Fortunately, Illinois state laws don’t vary too much from the laws of the federal WARN Act.
The main differences are in what employers are covered by the WARN Act and the punitive consequences for not following regulations. Illinois state laws have a more conservative view of which employers should have to comply with the WARN Act:
“The Illinois WARN Act requires employers with 75 or more full-time employees to give workers and state and local government officials 60 days advance notice of a plant closing or mass layoff.”
This is different from the federal WARN Act that requires notice if a company has over 100 employees. Although the law is different, it doesn’t vary so much that it will cause a huge difference in how your organization complies with the WARN Act. (Unless your organization is in that small window of companies that have 75-99 employees.)
Illinois state regulations also have punitive consequences laid out for not following the WARN Act:
“An employer that fails to provide notice as required by law is liable to each affected employee for back pay and benefits for the period of the violation, up to a maximum of 60 days. The employer may also be subject to a civil penalty of up to $500 for each day of the notice violation.”
This is different from federal regulations that don’t clearly state the consequences for following the WARN act regulations.
If you are laying off employees across state lines, you will also need to be aware of states that have different regulations that your organization must follow. If your organization is in this situation, it is best practice to find the state laws with the most stringent regulations and follow those across all of your locations.
Most states don’t have any regulations and are just required to follow the federal WARN Act. Along with Illinois, the following states have specific laws that your organization will need to review if you are also laying off employees in these locations:
- New Jersey
- New York
You can read more about these individual state laws by visiting the Employment Law Handbook website.
Always consult with your corporate counsel before executing a layoff event, and when researching laws regarding layoffs in your location.