If your organization is going through a reduction in force or layoff, you’re probably trying to figure out if you need to abide by the WARN Act or not. And if you do, you’ll need a WARN letter sample to craft your own employee notification from for your reduction event.
In this blog we will go over what to include in your WARN letter, and provide you with our own WARN letter sample. Then we will go over how to tell if your reduction event qualifies under the WARN Act.
Let’s get started…
WARN Letter Samples: What should you include?
You can download our WARN Letter sample here. It is a great template for creating a letter to send out to your employees.
When you begin to draft your WARN letter to employees, you’ll need to create 5 different sections in the letter. These 5 sections are already included in our WARN Letter sample.
The sections are:
- A statement about whether the layoff will be permanent or if employees will be called back.
- When the reduction event will start and when that specific employee is likely to be let go.
- Your organization’s policy on bumping rights.
- A list of severance benefits that your organization will provide when laying off.
- Contact information for if the employee has more questions.
Let’s take a deep dive into each of these.
Section 1: In this section you will need to let your employees know whether you are having a permanent reduction in force or a temporary layoff. You will want to explain why you have made a certain choice, or the rationale for why some employees are being permanently RIF’ed as opposed to other employees who are being temporary laid off.
Section 2: In this section you will need to go over the specific logistics of when, how, and where an employee will be let go. If you aren’t sure about any of this information, try as hard as possible to narrow in on something quantitative to give to your employees, such as a range of dates. This will help your employees prepare for their job search if they are being permanently reduced, or figure out there finances if they will be temporarily laid off.
Section 3: Several organizations have policies around bumping rights. Bumping rights are the right of an employee to bump off a lower level employee to keep a job at an organization in a reduction in force. For example, if you are going to layoff your line manager, he could bump out a line employee to keep a job at the organization. He would have to be in the lower position, and receive lower pay, but he would still have a position.
So in this section, make sure to describe what bumping rights your employees have and how they should execute upon them.
Section 4: In this section it is important to list what severance benefits your organization offers to employees. The benefits will probably be different based on if your employees are being temporarily laid off or permanently let go.
Employees that are being temporarily laid off will need information about the continuation of their health and financial benefits, while permanently laid off employees will need information about severance pay and outplacement services.
Section 5: This is the most simple section! Include contact information for someone in Human Resources at your organization to answer any questions that your employees might have about this WARN letter.
Make sure to download our WARN Letter Sample here to get started with your own WARN Notice.
WARN Letter Samples: Do your organization qualify under the WARN Act?
You can download our easy checklist here to see if your event qualifies:
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 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 shut down 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.”
Let’s dig into some examples.
Let’s say that Jayhawk Manufacturing has 95 full time employees. If they were planning on laying off any employees, they wouldn’t have to give a WARN notice. Unless, according to the plant closing and/or mass layoff stipulation, Jayhawk Manufacturing was going to close a facility that would affect more than 50 workers and last for more than 30 days, or if they were going to layoff more than 50 workers over a 30 day period (since this is more than 1/3rd of their workforce).
Pittsburgh Hockey Co. has over 600 employees, and while they aren’t closing down their facilities, they are planning on laying off 100 workers. If they do this within 30 days time, they will have to provide a WARN notice to these employees. If they do this over an elongated time period, they will not have to give a notice, since a mass layoff only qualifies if all employees are let go within the 30 day time period.
There are other things to consider about the WARN Act besides the regulations above. First, the WARN Act only applies to organizations where employees will be impacted by a “loss of employment”. Thus, employees who are let go for performance issues or are retiring will not apply to the WARN act regulations.
Ogletree Deakins explains what qualifies as a loss of employment:
“According to the WARN Act, an “employment loss” means “(A) an employment termination, other than a discharge for cause, voluntary departure, or retirement; (B) a layoff exceeding 6 months; or (C) a reduction in hours of work of more than 50 percent during each month of any 6-month period.” 29 U.S.C. § 2101(a)(6). An “employment loss” does not occur as a result of (i) a sale of all or part of a business, (ii) a relocation, (iii) a consolidation, (iv) an employee receives an offer to transfer to a different work site within a reasonable commuting distance, or (v) an employee’s receipt receives and accepts a transfer to a different work site regardless of distance."
Based on this explanation, the WARN Act only applies to employment loss that is not caused by performance issues, the employee voluntarily leaving for a position at another organization, or retirement. It also means that if your organization provides a job to an employee let go at one location, for a position at another location that is a reasonable commuting distance, you do not need to provide the WARN notice.
According to the United States Department of Labor, a reasonable commuting distance is a “a flexible term that will vary with local conditions. The factors to be considered in determining what is a reasonable commuting distance include: the accessibility of the place of employment, the quality of the roads, customarily available transportation and usual or customary travel times. The commuting distance is measured from the worker's home.”
This means that a reasonable commuting distance might be different for an employee working at Jayhawk Manufacturing in Lawrence, Kansas, as opposed to an employee working at Pittsburgh Hockey Co. in Pittsburgh, Pennsylvania.
WARN Letter Samples: How to Comply
If you fall into any of the categories listed above, you will need to comply with the WARN Act. Now, what does this mean for your organization?
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 preprinted 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.
The WARN letter samples that we covered above are what you should use to notify your employees of their layoff. Download the sample, modify to your organization’s information, and then send out to comply with this law.
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.”
Some states have their own WARN Act laws, which place more stringent regulations on organizations. Make sure to have your corporate counsel assess all of the state laws that could impact your business.