Adjustment and Retraining

EMPLOYMENT ALERT

You are WARN - ed!

So you want to reduce the number of your employees or 'close up shop.' What are your rights?

So your employer is reducing the number of employees or 'closing up shop' What are your rights?

By Karen A. Khan, Esq.

The current economic climate has forced numerous Employers to either close up shop or significantly reduce operations at a particular location. Regardless of who is to blame for the economic crisis, and there is plenty of blame to go around, there are a few things Employees and Employers alike should be aware of.

A federal law called the Worker Adjustment and Retraining Notification Act of 1988 (WARN), requires that employers provide advance notice to the affected employees. Federal, State, and local government entities that provide public services are not covered by WARN.

What must employers do and what must employees receive?

If you are an employer, then you must comply with WARN if you have 100 or more employees. This number does not include employees who have worked for less than 6 months in the last 12 months; or employees who have worked an average of less than 20 hours a week.

If you are an employee, under the WARN Act, your employer must, with very limited exceptions, provide 60 days advance written notice to affected workers or their representatives. If an Employer does not provide the required notice to its employees, then an aggrieved employee may hold the employer liable for back pay and benefits for the period of the violation, up to 60 days.

It is anticipated that the number of WARN Act lawsuits will increase because of the economic upheaval we are experiencing. Additionally, a growing number of states have adopted more expansive WARN legislation than the federal law. So employers and employees must check the laws of their particular states.

For example, the state of New York's WARN Act, which is effective February 1, 2009, requires that employers with 50 or more full-time employees, (as compared to 100 employees in the federal legislation), give at least 90 days' advance written notice to affected employees (as compared with 60 days notice under the federal WARN Act).

Closer to home, if you are an employer or employee in the Washington metropolitan area, the District of Columbia and Virginia have not adopted more expansive WARN Act legislation, but Maryland has. For employers and employees in Maryland, Maryland's Economic Stabilization Act requires any Employer with at least 50 full-time employees, that operates industrial, commercial or business enterprises in the state, and which has been in business at least one year, to provide at least 90 days' advance written notice to affected employees, whenever possible. This is more expansive than the federal WARN Act, as Maryland requires that smaller employers provide much more advance notice to their employees. The Maryland General Assembly has also developed voluntary guidelines for Employers to provide continued health care coverage to the affected Employees.

Employers who fail to comply with WARN Acts in their particular states can find themselves paying out considerable amounts in backpay and benefits to the affected employees who did not receive the proper advance notice. Employees who did not receive the advance notice required under the WARN Act can bring suit for these benefits. It is important to know what your obligations and rights are in these troubled financial times, whether you are an employee faced with a reduction in workforce or an employer with a need to reduce the number of employees, or to 'close up shop.'

The contents of this Employment Alert are intended for informational purposes only and must not be considered as legal advice.

Karen A. Khan is a local attorney and litigator representing employers and employees in all areas of employment law who has represented both large corporations and individual employees alike in employment discrimination matters, and who has conducted litigation nationwide.

The Khan Law Group, PLLC is a Washington, D.C. based employment law firm representing corporate clients as well as individual employees with employment issues in Washington DC, Maryland, Virginia, and nationwide. The Group is dedicated to providing the highest calibre of personalized legal services and representation.

Contact The Khan Law Group, PLLC at 202-290-1670, for a confidential consultation.