A large layoff can trigger 60 days of notice, and benefits are part of what the law protects.
The federal Worker Adjustment and Retraining Notification Act requires advance notice of certain plant closings and mass layoffs. Pay and benefits are part of the remedy when notice is missed. This page covers who is covered, what triggers notice and how benefits fit in.
Who and what is covered.
Thresholds are measured at a single site of employment, and part-time employees are generally left out of the counts.
Covered Employers
Employers with 100 or more employees, not counting part-time employees, or 100 or more employees who together work at least 4,000 hours a week, not counting overtime.
Plant Closing
A shutdown of a single site, or of an operating unit within it, that causes an employment loss for 50 or more employees in any 30-day period.
Mass Layoff
A reduction in force that is not a plant closing and causes an employment loss at one site for at least 33% of employees and at least 50 of them, or for at least 500 employees, in any 30-day period.
Notice and timing.
The rule is written notice, in advance, to the right people.
60 Calendar Days
Written notice is due at least 60 calendar days before the closing or layoff takes effect.
Who Gets Notice
Each affected employee or their union representative, the state dislocated worker unit, and the chief elected official of the local government.
Narrow Exceptions
Faltering company, unforeseeable business circumstances and natural disaster can shorten the period. The employer still gives as much notice as practicable and explains why.
How benefits fit in.
Benefits show up in the remedy and in the administration.
Liability Includes Benefits
An employer that violates WARN can owe back pay and benefits for each day of violation, up to 60 days, including the cost of medical expenses a benefit plan would have covered.
Health Coverage and COBRA
Coverage ends under the plan’s terms, and a layoff that ends coverage is a COBRA qualifying event. WARN does not replace COBRA.
Offsets
Wages paid for the period and certain voluntary payments can reduce what is owed. Severance paid under a separate obligation does not always count, so have counsel review.
Planning ahead.
A large separation is easier when the benefits side is lined up early.
Count Early
Check how many employees are at each site, which are part-time, and how many separations fall inside a 30-day window before a decision is final.
Coordinate Benefits
Ask the carrier and COBRA administrator how termination dates, eligibility and billing work for a group of departures.
Sale of a Business
In a sale, the seller owes notice through the effective date and the buyer after it. Employees of the seller generally become the buyer’s employees on that date.
Questions Employers Ask About WARN and Benefits
Does WARN apply to a small employer?
Federal WARN generally covers employers with 100 or more employees, not counting part-time employees. Smaller employers are outside it, though other state or contract obligations may apply.
Does a temporary layoff count?
A layoff of more than six months, or a reduction in hours of more than 50% in each month of a six-month period, counts as an employment loss. Shorter layoffs generally do not.
Do we keep paying for health coverage during the notice period?
If notice is given, employees stay employed and covered under the plan’s terms. If notice is missed, liability can include the medical expenses the plan would have paid.
Does WARN replace COBRA?
No. COBRA is a separate right that begins when coverage is lost.
Who has to be notified?
Each affected employee or their union representative, the state dislocated worker unit and the chief elected official of the local government.
Do part-time employees count?
Part-time employees are generally left out of the thresholds, though they may still be owed notice. A part-time employee averages fewer than 20 hours a week or has worked fewer than six of the last 12 months.
Related guides.
Layoffs, Furloughs and Reductions in Force
Benefits through a separation.
Severance Agreements and Health Coverage
COBRA subsidies and release terms.
COBRA Rules for Employers
Periods, premiums and notices.
Right-Sizing HR After Layoffs: The Benefits Workload
What lands on HR after a layoff.
Planning a closing or reduction in force?
We can map the benefits side with you and coordinate with your employment counsel. This page is general information, not legal advice.
Your plan type
Employee count
The policy or situation
Your state
Rough answers are fine. We build the numbers from there.
Laws and rules referenced
29 U.S.C. § 2101 — Definitions: employer, plant closing, mass layoff, employment loss.
29 U.S.C. § 2102 — Notice required before plant closings and mass layoffs.
29 U.S.C. § 2104 — Administration and enforcement; liability including benefits.
U.S. Department of Labor: WARN — Employer guide.
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