Two Can Play This Game? (WARN) Act provides workers the autonomy to beat employers at their own game.

Author: Alanna Hodgson, J.D.

November 6th, 2023

     Employers were once the captains of the kickball games, steadily choosing black and brown employees last on their team(s). Last to receive adequate compensation, last to be chosen for a promotion, and even last to receive a job call back! A Harvard University study, “Discrimination in a Low-Wage Labor Market”, revealed black and white applicants who applied for similar entry level positions with an equivalent resume, the black applicants, were half as less likely as equally qualified whites to receive a call back or a job offer. Even black applicants with clean background records fared no better than white applicants who were just released from prison!

   Yet, the pandemic had employees toggling between first and second base. On the one hand, doors to schools and businesses alike were shutting down, and Americans, especially black and brown folks, suffered both economic and social losses. Slowly the labor market began to rebound, and the labor force participation rate for Black men increased to 8.8 percent. Now, tech giants such as Google, Zoom, and Pinterest went on a hiring bonanza to meet the consumers need for more online shopping and remote job opportunities. Were employees the new team captains? Employees could command competitive salaries, flexibility, remote work, and inclusivity in the workplace. But not so fast, the employers caught the ball to tag the employees OUT. More than 108,000 people were laid off due to “streamlining and meeting the current business demands.” Surprise, surprise, blacks only represented 7% of the tech workforce, where only about 2% were the computer gurus, and the remainder performed administrative tasks. These mass layoffs exacerbated the racial disparities that already existed.

     Despite the backdrop of job disparities and racial inequalities, the innings have just begun. In August 1988, Congress passed the Worker Adjustment and Retraining Notification (WARN) Act. The federal WARN act applies to businesses with 100 or more employees and/ or mass plant closings. Businesses are required to provide employees with a 60-day advance notice of mass closings and/or mass layoffs. Theoretically, the 60-day notice was an effort to allow employees time to either transition between one job to another or enter skills training programs. However, not every employer is covered by the federal WARN Act. The term “employer” means any business enterprise that employs 100 or more people, excluding part-time workers, or 100 or more employees, including part-timers who in the aggregate work at least 4,000 hours per week, exclusive of hours of overtime. Closing a plant refers to permanent or temporary shutdown that results in employment loss for 50 or more employees. Affected employees must receive notice detailing whether a shutdown is permanent or temporary.

    An employer’s failure to comply with the federal WARN Act, and its state’s provisions will result in penalties. For example, Yellow Corp, a transportation holding company, announced it was laying off all its company’s employees. Before a supervisor could even call its worker into the office to have “the talk”, a class action suit ensued, because Yellow Corp failed to provide the federally mandated 60 days layoff notice. States also have the discretion to make the WARN penalties and provisions stricter. The State of New Jersey employs a mini warn notice, where an organization with fifty or more employees, must provide its employees with 90-day advance mass layoff period. Furthermore, employers who disobey the notice period are required to “pay employees one week of severance for each year of service to the terminated employees”. California, for instance, imposes a “civil penalty of $500 a day for each day of violation, and employees may receive back pay for the final rate or 3-year average rate of compensation, whichever is higher”. Wait there’s more! An employer may also be found “liable for cost of any medical expenses incurred by employees that would have been covered under an employee benefit plan”.

   When an employee feels the tension looming over their cubicle, simply google “warn notice” and insert the name of their state. A weekly report is generated listing all employers, who meet the federal qualifications, and performing mass plant closing or layoffs within a 60-day period. All workers can utilize this legislation to safely reach the home plate which keeps them abreast to market conditions and score a home run!

Cited Sources:

http://www.dmiblog.com/archives/2007/09/white_convicts_as_likely_to_be.html

https://www.dol.gov/sites/dolgov/files/ETA/Layoff/pdfs/_EmployerWARN2003.pdf

https://www.fastcompany.com/90856102/mass-layoffs-tech-control-tactic-bosses-regain-power

https://www.corporatecomplianceinsights.com/warn-obligations-layoff/

https://www.forbes.com/sites/janicegassam/2023/02/19/black-workers-are-the-hardest-hit-by-tech-layoffs/?sh=1c40bf56313e

https://www.gtlaw.com/en/insights/2023/5/new-jerseys-miniwarn-act-amendments-including-mandatory-severance-now-in-effect