By Alan Rauss & Alexis Preskar
As Ohio and other states mandate the closure of non-essential businesses – including restaurants (for dine-in service), bars, gyms, salons and more – to help stop the spread of COVID-19 coronavirus, many employers are forced to lay off employees. Employers should make sure they are complying with layoff requirements.
The federal WARN Act generally requires employers give employees 60 days’ notice before a mass layoff, but that amount of notice is nearly impossible given the global pandemic. While many states have “mini” WARN Acts that impose different restrictions, Ohio does not. However, it does require giving notice of a mass layoff to the director of Job and Family Services.
Here are the basics on WARN and what employers need to do to comply.
Who does WARN apply to?
- 100 or more employees, excluding part-time employees, and
- 100 or more employees, including part-time employees, who collectively work at least 4,000 hours each week, excluding overtime.
Part-time employees are people who work less than 20 hours a week on average or those who have worked less than 6 of the last 12 months on the date of the notice.
What triggers WARN?
Plant closings and mass layoffs.
A plant closing is the “permanent or temporary shutdown of a single site of employment, or one or more facilities or operating units within a single site of employment” which results in the loss of employment for a 30-day period for 50 or more employees.
A mass layoff is the loss of employment at a single site for a 30-day period for:
- 50 employees, if they represent at least 33 percent or more of employees; OR
- 500 or more employees.
Part-time employees do not count toward the number of employees for either a plant closing or mass layoff.
A loss of employment is either (a) termination, (b) a lay off for more than six months, (c) a 50% or more reduction in hours for each month of a six–month period.
Is notice required during COVID-19?
Layoffs because of COVID-19 will not qualify as a loss of employment if they are short-term. So long as there is no reasonable expectation that the layoff will last for six months, it is not necessary to provide a WARN notice. If it later becomes likely that the layoff will last for six months or more, a WARN notice can be sent at that time.
WARN does provide that notices can be delayed in the event that the mass layoff is due to unforeseeable business circumstances or a natural disaster. However, while COVID-19 may fall within those categories, there is no need to consider whether these exceptions apply at this time. If it turns out that the layoff may actually last for 6 months or more, so that a WARN Notice will be required, a further analysis of whether an additional delay due to unforeseen business circumstances or a natural disaster is warranted can be undertaken at that time.
What should employers do?
As noted above, no WARN notice appears to be required at this time. But the bottom line is: Be reasonable and transparent with employees. If layoffs are necessary, provide as much notice as practicable, explain the situation and keep apprised of the situation while keeping employees updated on changes. This is a stressful and challenging time for everyone, and the more reasonable and fair employers are, the less likely an employee will complain about procedures later.
If you have additional questions about the WARN Act or other employment matters in light of COVID-19, contact Alan Rauss at firstname.lastname@example.org or 216.736.7221, Alexis Preskar at email@example.com or 614.427.5748, or reach out to any of our Labor & Employment professionals.