WORKER ADJUSTMENT RETRAINING
AND NOTIFICATION
IN CASE OF OFFICE CLOSING OR MASS LAYOFF
Summary
Section 205 of the Congressional
Accountability Act (CAA) applies certain rights and protections
of the Worker Adjustment and Retraining Notification Act (WARN)
to covered employees. This section requires certain covered employing
offices to provide notice 60 days in advance of an office closing
or a mass layoff. The notice must be provided to either the affected
employees or to their representatives (e.g., a labor union). Also,
the CAA requires the Board to issue regulations that must ordinarily
be the same as the substantive regulations promulgated by the Secretary
of Labor (Secretary) under WARN.
This summary describes the WARN rights and protections
applied by the CAA, followed by questions and answers and regulations
issued by the Board.
1.
Coverage
Employing offices are covered by the WARN provisions
of the CAA only if they meet these size thresholds:
- 100 or more employees, excluding "part-time
employees ;" or
- 100 or more employees, including "part-time
employees," who in the aggregate work at least 4,000 hours
per week, exclusive of overtime.
Part time employees are employees who work an
average of less than 20 hours per week or who worked less than 6
months in the last 12 months (e.g., seasonal employees).
The covered employees and employing offices subject generally to
the CAA are described in the Introductory section.
2.
What Events Trigger the Notice Requirement?
A covered employing office's obligation to give
notice is triggered by an "office closing" or a "mass
layoff" that is large enough to meet thresholds stated in the
law and regulations.
- An Office Closing is the permanent
or temporary shutdown of an employment site (or one or more facilities
or operating units within an employment site) if the shutdown
results in an "employment loss" (defined later) to 50
or more employees (other than part-time employees) during any
30-day period.
- A Mass Layoff is a reduction in force (other
than an office closing) that results in an "employment loss"
at an employment site during any 30 day period for at least 50
employees, who make up at least 33 percent of the active employees
(other than part-time employees). Where 500 or more employees
(excluding part-time employees) are affected, the 33 percent requirement
does not apply.
(The difference is that an "office closing"
involves shutdown of one or more distinct units within a single
site or of the entire site, while a "mass layoff" involves
employment loss regardless of whether one or more units are shut
down.)
Subject to certain exceptions, an employment
loss generally means (1) an employment termination (other than for
cause, or a voluntary departure, or a retirement); (2) a layoff
exceeding 6 months; or (3) a reduction in an employee's work hours
of more than 50 percent in
each month of any 6-month period.
Even if employment losses of two or more groups
of workers during any 30-day period are below the thresholds to
trigger notice requirements, notice may nevertheless be required
if the employment losses during any 90-day period, added together,
reach the threshold.
3.
Privatization or Sale of Operations
In the case of the privatization or sale of part
or all of an employing office's operations, the employing office
is responsible for providing notice of any office closing or mass
layoff that takes place up to and including the effective date (time)
of the privatization or sale. The contractor or buyer is responsible
for providing any required notice of any office closing or mass
layoff that takes place after the privatization or sale.
4.
Notice Requirements
a. Recipients
The employing office must serve written notice
upon the collective bargaining representatives of "affected
employees" or, if there are no representatives, upon the affected
employees themselves. An affected employee is a covered employee
who is reasonably expected to experience an employment loss as a
consequence of a proposed office closing or mass layoff of their
employing office.
b. Contents
Although no particular form of notice is required,
the notice must be in writing, specific and must contain each of
the elements required in regulations of the Board.
c. Notice period,
exceptions
With limited exceptions, notice must be timed
to reach the required parties at least 60 days before an office
closing or a mass layoff.
Regulations of the Board state two circumstances
under which the notification period may be reduced to less than
60 days:
- business circumstances that were not
reasonably foreseeable at the time the 60 day notice would have
been required; or
- a natural disaster, such as an earthquake,
flood, or drought.
The employing office must prove that the conditions
for the exception have been met. If an exception is applicable,
the employing office must give as much notice as is practicable,
together with a brief statement of the reason for reducing the notification
period.
Additional notice is required when the date or
schedule of dates of a planned office closing or mass layoff is
extended beyond the date announced in the original notice.
5. Exemption for
Temporary Employment
An employing office does not need to give notice
if the office closing is the closing of a temporary facility, or
if the closing or layoff is the result of the completion of a particular
project or undertaking. This exemption applies only if the affected
employees were hired with the understanding that their employment
was limited to the duration of the facility or the project or undertaking.
6. Intimidation
or Reprisal
Intimidation, reprisal, or discrimination against
a covered employee for opposing practices or for initiating or participating
in a proceeding is prohibited, as described in the Introductory
section.
7. Remedies
In case of a violation, the covered employee
may recover --
- back pay, and benefits under an employee benefits
plan, for each day of violation for up to 60 days (but in no event
more than one-half the number of days the employee was employed
by the employing office).
Offsets to the amount of liability are allowed
for certain payments made by the employing office to the employee,
including wages or benefits for the period of violation, and any
voluntary and unconditional payment. Furthermore, reductions in
the employing office's liability may be allowed where the notice
was made in good faith and the employer had reasonable grounds for
believing that it was not violating applicable WARN requirements
under the CAA.
The provisions of WARN, made applicable by the CAA, do not require
an employing office or contractor to hire or reinstate a covered
employee who was not given required notice.
A description of the generally applicable remedies
(attorneys fees, interest) and limitations (no civil penalties or
punitive damages) is found in the Introductory section.
WORKER ADJUSTMENT
RETRAINING AND NOTIFICATION ACT (WARN)
Questions and Answers
1. Q.What does section 205 of the CAA require?
A. Section 205
applies the rights and protections of the Worker Adjustment Retraining
and Notification Act to covered employees and requires certain employing
offices to provide employees with at least 60 days notice before
a closing or a mass layoff.
2. Q.Are all employing offices covered?
A. No. Section
205 does not apply to every employing office covered under the CAA.
Section 205 applies only to employing offices meeting the size thresholds
under WARN. This means that employing offices covered under section
205 of the CAA will be employing offices that employ (a) 100 or
more employees, excluding part-time employees, or (b) 100 or more
employees, including part-time employees, if in the aggregate the
employees work at least 4000 hours per week, exclusive of overtime.
However, even if employment losses of two or more groups of workers
during any 30-day period are below the threshold to trigger notice
requirements, notice may nevertheless be required if the employment
losses during any 90-day period, added together, reach the threshold.
3. Q. Must the employing office give notice in
the case of the privatization or sale of the employing office's
operations?
A. In the case
of the privatization or sale of an employing office's operations,
the employing office must give notice of any office closing or mass
layoff which takes place up to and including the effective date
of the sale or privatization. The contractor or buyer will be responsible
for providing any required notice of any office closing or mass
layoff that takes place after the effective date of the sale or
privatization.
4. Q. What is the difference
between an "office closing" and a "mass layoff"?
A. An office closing
is the shutdown of a "single site of employment," or one
or more "facilities or operating units" within a single
site of employment, if the shutdown results in an "employment
loss" during any 30 day period of 50 or more full time employees.
A shutdown occurs when the work performed by the unit effectively
comes to a stop.
A mass layoff is a reduction in force that is
not the result of an office closing. Further, it must result in
an employment loss at a single site of employment during any 30
day period of at least 33 percent of the active full time employees,
and at least 50 full time employees.
An employment loss is any one of the following
three things: (1) an employment termination, other than a discharge
for cause, voluntary departure, or retirement; (2) a layoff exceeding
6 months; or (3) a reduction in hours of work of individual employees
of more than 50% during each month of any 6-month period.
5. Q. What is "adequate
notice"?
A. All notices
must be in writing, although notice need not be in any particular
form. Any reasonable method of delivery designed to ensure receipt
60 days before a closing or layoff is acceptable.
Notice must be specific and must contain the
name and address of the employment site where the office closing
or mass layoff will occur, and the name and telephone number of
an employing office official to contact for further information;
a statement as to whether the planned action is expected to be permanent
or temporary and, if the entire office is to be closed, a statement
to that effect; the expected date of the first separation and the
anticipated schedule for making separations; and the job titles
of positions to be affected and the names of the workers currently
holding affected jobs. The employing office may include other information
as it deems necessary.
6. Q. Must notice be
given during a temporary shutdown?
A. Notice must
only be given during a temporary shutdown if it results in an employment
loss as defined in question 4, above.
7. Q. If an employing
office fails to provide adequate notice to a covered employee, may
the employee get his job back?
A. No. An employing
office that violates section 205 of the CAA by ordering an office
closing or mass layoff without the appropriate notice is liable
to each aggrieved employee for an amount including back pay and
benefits for the period of the violation, up to 60 days. The employing
office's liability may be reduced by such items as wages paid by
the employing office to the employee during the period of the violation
and any voluntary and unconditional payment by the employing office
to the employee that is not required by any legal obligation.
8. Q. If an employing
office is shutdown due to a natural disaster, must the employing
office provide the 60 days notice?
A. No. Employing
offices need not provide 60 days notice where the shutdown is a
direct result of a natural disaster, but must give as much notice
as is practicable. When notice is given, it must include a brief
statement of the reason for reducing the notice period. Natural
disasters would include occurrences such as floods, earthquakes,
droughts, storms. The same rule applies to closings or layoffs due
to unforeseen business circumstances that were not reasonably foreseeable
at the time notice would otherwise have been required.
OFFICE OF COMPLIANCE
The Congressional Accountability Act of
1995: Extension of Rights and Protections Under the Worker Adjustment
and Retraining Notification Act of 1988
NOTICE OF ADOPTION OF REGULATION AND SUBMISSION
FOR APPROVAL AND ISSUANCE OF INTERIM REGULATIONS
SUMMARY: The Board
of Directors, Office of Compliance, after considering comments to
its Notice of Proposed Rulemaking published November 28, 1995 in
the Congressional Record, has adopted, and is submitting for approval
by the Congress, final regulations implementing section 205 of the
Congressional Accountability Act of 1995 ("CAA"). The
Board is also adopting and issuing such regulations as interim regulations
for the House of Representatives, the Senate, and the employing
offices of the instrumentalities effective on January 23, 1996 or
on the dates upon which appropriate resolutions of approval are
passed, whichever is later. The interim regulations shall expire
on April 15, 1996 or on the dates on which appropriate resolutions
concerning the Board's final regulations are passed by the House
and the Senate, respectively, whichever is earlier.
FOR FURTHER INFORMATION
CONTACT: Executive Director, Office of Compliance, Room LA
200, Library of Congress, Washington, D.C. 20540-1999. Telephone:
(202) 724-9250.
SUPPLEMENTARY INFORMATION:
Background and Summary
The Congressional Accountability Act of 1995
("CAA"), P.L. 104-1, was enacted into law on January 23,
1995. 2 U.S.C. §§ 1301 et seq. In general, the CAA applies
the rights and protections of eleven federal labor and employment
statutes to covered employees and employing offices within the legislative
branch. Section 205 of the CAA provides that no employing office
shall be closed or a mass layoff ordered within the meaning of section
3 of the Worker Adjustment Retraining and Notification Act of 1988,
29 U.S.C. § 2102 ("WARN"), until the end of a 60-day
period after the employing office serves written notice of such
prospective closing or layoff to representatives of covered employees
or, if there are no representatives, to covered employees. 2 U.S.C.
§ 1315(a). Section 225(f) of the CAA provides that, "[e]xcept
where inconsistent with definitions and exemptions provided in this
Act, the definitions and exemptions in [WARN] shall apply under
this Act." 2 U.S.C. § 1361(f).
Sections 205(c) and 304(a) of the CAA directs
the Board of Directors of the Office of Compliance established under
the CAA to issue regulations implementing section 205 of the CAA.
2 U.S.C. §§ 1315(c), 1384(a). Section 205(c) further states
that such regulations "shall be the same as substantive regulations
promulgated by the Secretary of Labor to implement the statutory
provisions referred to in subsection (a) except insofar as the Board
may determine, for good cause shown and stated together with the
regulation, that a modification of such regulations would be more
effective for the implementation of the rights and protections under
this section." 2 U.S.C. § 1315(c).
To obtain input from interested persons on the
content of these regulations, the Board published for comment a
Notice of Proposed Rulemaking in the Congressional Record, 141 Cong.
Rec. S17652 (daily ed., Nov. 28, 1995), inviting comments regarding
the proposed regulations. The Board received three comments on the
proposed regulations from interested parties. Two of the comments,
without elaboration, supported the regulations as proposed. Only
one commenter took issue with sections of the proposed regulations
and the Board's resolution of certain issues raised in the NPR.
In addition, the Office has sought consultations with the Secretary
of Labor regarding the proposed regulations, pursuant to section
304(g) of the CAA.
After full consideration of the comments received
in response to the proposed rule, the Board has adopted and is submitting
these regulations for approval by the Congress. Moreover, pursuant
to sections 304 and 411, the Board is adopting and issuing such
regulations as interim regulations for the House, the Senate and
the employing offices of the instrumentalities effective on January
23, 1996 or on the dates upon which appropriate resolutions of approval
are passed, whichever is later. The interim regulations shall expire
on April 15, 1996 or on the dates on which appropriate resolutions
concerning the Board's final regulations are passed by the House
and the Senate, respectively, whichever is earlier.
I. Summary of Comments and Board's Final
Rules
A. Employer Coverage.
One commenter suggested that, in proposed section 639.3(a), the
Board replace the term "business enterprise" with "of
the offices listed in section 101(9) of the CAA, 2 U.S.C. §
1301(9)." Upon consideration of the matter, the Board incorporates
the commenter's suggestion because the modification accurately and
precisely states the coverage of the provision.
B. Sale of Business.
A commenter suggested that the concept of a "sale of business"
in proposed section 639.4(c) of the regulations is inapplicable
to this commenter's specific operations. It suggests that the language
of proposed section 639.4(c) be changed from "sale of business"
to "privatization."
The Board sees no substantive difference between
the concept of "sale of business" and "privatization"
for purposes of this section. Therefore, the Board adds the nomenclature
suggested by the commenter to accord more naturally to situations
within the legislative branch. However, by making this change, the
Board does not intend any substantive difference between the meaning
of section 639.3(c) and the section of the Secretary's regulations
from which it is derived.
C. Encouragement
Regarding Notice.
A commenter suggested that proposed section 639.1(c), which encourages
employing offices to give notice even where not required, be deleted.
The commenter suggested that the deletion is justified because section
7 of WARN, which provides authority for this regulation, is not
incorporated into the CAA.
On further consideration of the matter, the Board
will not include this section in its adopted regulation. The section
does not implement any substantive requirement of WARN, as applied
by the CAA, and thus its inclusion in these regulations is not required
by the CAA.
D. Technical and
Nomenclature Changes.
A commenter suggested a number of technical and nomenclature changes
to the proposed regulations to make them more precise in their application
to the legislative branch. The Board has incorporated many of the
changes suggested by the commenter. However, by making these changes,
the Board does not intend a substantive difference in the meaning
of these sections of the Board's regulations and those of the Secretary
from which the Board's regulations are derived.
E. Scope of Regulations.
The regulations issued by the Board herein are on all matters for
which section 205 of the CAA requires a regulation to be issued.
Specifically, it is the Board's considered judgment, based on the
information available to it at the time of promulgation of these
regulations, that, with the exception of regulations adopted and
set forth herein, there are no other "substantive regulations
promulgated by the Secretary of Labor to implement the statutory
provisions referred to in subsection (a) [of section 205 of the
CAA]." 2 U.S.C. §1315(c).
II. Adoption of Proposed Rules as Final
Regulations under Section 304(b)(3) and as Interim Regulations.
Having considered the public comments to the
proposed rules, the Board, pursuant to section 304(b)(3) and (4)
of the CAA, is adopting these final regulations and transmitting
them to the House and the Senate with recommendations as to the
method of approval by each body under section 304(c). However, the
rapidly approaching effective date of the CAA's implementation necessitates
that the Board take further action with respect to these regulations.
For the reasons explained below, the Board is also today adopting
and issuing these rules as interim regulations that will be effective
as of January 23, 1996 or the time upon which appropriate resolutions
of approval of these interim regulations are passed by the House
and/or the Senate, whichever is later. These interim regulations
will remain in effect until the earlier of April 15, 1996 or the
dates upon which the House and Senate complete their respective
consideration of the final regulations that the Board is herein
adopting.
The Board finds that it is necessary and appropriate
to adopt such interim regulations and that there is "good cause"
for making them effective as of the later of January 23, 1996, or
the time upon which appropriate resolutions of approval of them
are passed by the House and the Senate. In the absence of the issuance
of such interim regulations, covered employees, employing offices,
and the Office of Compliance staff itself would be forced to operate
in regulatory uncertainty. While section 411 of the CAA provides
that, "if the Board has not issued a regulation on a matter
for which this Act requires a regulation to be issued, the hearing
officer, Board, or court, as the case may be, shall apply, to the
extent necessary and appropriate, the most relevant substantive
executive agency regulation promulgated to implement the statutory
provision at issue in the proceeding," covered employees, employing
offices and the Office of Compliance staff might not know what regulation,
if any, would be found applicable in particular circumstances absent
the procedures suggested here. The resulting confusion and uncertainty
on the part of covered employees and employing offices would be
contrary to the purposes and objectives of the CAA, as well as to
the interests of those whom it protects and regulates. Moreover,
since the House and the Senate will likely act on the Board's final
regulations within a short period of time, covered employees and
employing offices would have to devote considerable attention and
resources to learning, understanding, and complying with a whole
set of default regulations that would then have no future application.
These interim regulations prevent such a waste of resources.
The Board's authority to issue such interim regulations
derives from sections 411 and 304 of the CAA. Section 411 gives
the Board authority to determine whether, in the absence of the
issuance of a final regulation by the Board, it is necessary and
appropriate to apply the substantive regulations of the executive
branch in implementing the provisions of the CAA. Section 304(a)
of the CAA in turn authorizes the Board to issue substantive regulations
to implement the Act. Moreover, section 304(b) of the CAA instructs
that the Board shall adopt substantive regulations "in accordance
with the principles and procedures set forth in section 553 of title
5, United States Code," which have in turn traditionally been
construed by courts to allow an agency to issue "interim"
rules where the failure to have rules in place in a timely manner
would frustrate the effective operation of a federal statute. See,
e.g., Philadelphia Citizens in Action v. Schweiker, 669 F.2d 877
(3d Cir. 1982). As noted above, in the absence of the Board's adoption
and issuance of these interim rules, such a frustration of the effective
operation of the CAA would occur here.
In so interpreting its authority, the Board recognizes
that in section 304 of the CAA, Congress specified certain procedures
that the Board must follow in issuing substantive regulations. In
section 304(b), Congress said that, except as specified in section
304(e), the Board must follow certain notice and comment and other
procedures. The interim regulations in fact have been subject to
such notice and comment and such other procedures of section 304(b).
In issuing these interim regulations, the Board
also recognizes that section 304(c) specifies certain procedures
that the House and the Senate are to follow in approving the Board's
regulations. The Board is of the view that the essence of section
304(c)'s requirements are satisfied by making the effectiveness
of these interim regulations conditional on the passage of appropriate
resolutions of approval by the House and/or the Senate. Moreover,
section 304(c) appears to be designed primarily for (and applicable
to) final regulations of the Board, which these interim regulations
are not. In short, section 304(c)'s procedures should not be understood
to prevent the issuance of interim regulations that are necessary
for the effective implementation of the CAA.
Indeed, the promulgation of these interim regulations
clearly conforms to the spirit of section 304(c) and, in fact promotes
its proper operation. As noted above, the interim regulations shall
become effective only upon the passage of appropriate resolutions
of approval, which is what section 304(c) contemplates. Moreover,
these interim regulations allow more considered deliberation by
the House and the Senate of the Board's final regulations under
section 304(c).
The House has in fact already signaled its approval
of such interim regulations both for itself and for the instrumentalities.
On December 19, 1995, the House adopted H. Res. 311 and H. Con.
Res. 123, which approve "on a provisional basis" regulations
"issued by the Office of Compliance before January 23, 1996."
The Board believes these resolutions are sufficient to make these
interim regulations effective for the House on January 23, 1996,
though the House might want to pass new resolutions of approval
in response to this pronouncement of the Board.
To the Board's knowledge, the Senate has not
yet acted on H. Con. Res. 123, nor has it passed a counterpart to
H. Res. 311 that would cover employing offices and employees of
the Senate. As stated herein, it must do so if these interim regulations
are to apply to the Senate and the other employing offices of the
instrumentalities (and to prevent the default rules of the executive
branch from applying as of January 23, 1996).
III. METHOD OF APPROVAL
The Board received no comments on the method
of approval for these regulations. Therefore, the Board continues
to recommend that (1) the version of the regulations that shall
apply to the Senate and employees of the Senate should be approved
by the Senate by resolution; (2) the version of the regulations
that shall apply to the House of Representatives and employees of
the House of Representatives should be approved by the House of
Representatives by resolution; and (3) the version of the regulations
that shall apply to other covered employees and employing offices
should be approved by the Congress by concurrent resolution.
With respect to the interim version of these
regulations, the Board recommends that the Senate approve them by
resolution insofar as they apply to the Senate and employees of
the Senate. In addition, the Board recommends that the Senate approve
them by concurrent resolution insofar as they apply to other covered
employees and employing offices. It is noted that the House has
expressed its approval of the regulations insofar as they apply
to the House and its employees through its passage of H. Res. 311
on December 19, 1995. The House also expressed its approval of the
regulations insofar as they apply to other employing offices through
passage of H. Con. Res. 123 on the same date; this concurrent resolution
is pending before the Senate.
Adopted Regulations -- As Interim Regulations
and As Final Regulations
APPLICATION OF RIGHTS AND PROTECTIONS OF
THE WORKER ADJUSTMENT RETRAINING AND NOTIFICATION ACT OF 1988 (Implementing
Section 204 of the CAA)
§639.1 Purpose and
scope.
§639.2 What does WARN require?
§639.3 Definitions.
§639.4 Who must give notice?
§639.5 When must notice be given?
§639.6 Who must receive notice?
§639.7 What must the notice contain?
§639.8 How is the notice served?
§639.9 When may notice be given less than
60 days in advance?
§639.10 When may notice be extended?
§639.11 Duration of Interim Regulations
§639.1 Purpose and
scope.
(a) Purpose of WARN as applied by the CAA. Section 205 of the Congressional
Accountability Act, P.L. 104-1 ("CAA"), provides protection
to covered employees and their families by requiring employing offices
to provide notification 60 calendar days in advance of office closings
and mass layoffs within the meaning of section 3 of the Worker Adjustment
and Retraining Notification Act of 1988, 29 U.S.C. § 2102.
Advance notice provides workers and their families some transition
time to adjust to the prospective loss of employment, to seek and
obtain alternative jobs and, if necessary, to enter skill training
or retraining that will allow these workers to successfully compete
in the job market. As used in these regulations, WARN shall refer
to the provisions of WARN applied to covered employing offices by
section 205 of the CAA.
(b) Scope of these regulations. These regulations
are issued by the Board of Directors, Office of Compliance, pursuant
to sections 205(c) and 304 of the CAA, which directs the Board to
promulgate regulations implementing section 205 that are "the
same as substantive regulations promulgated by the Secretary of
Labor to implement the statutory provisions referred to in subsection
(a) [of section 205 of the CAA] except insofar as the Board may
determine, for good cause shown. . . that a modification of such
regulations would be more effective for the implementation of the
rights and protections under this section." The regulations
issued by the Board herein are on all matters for which section
205 of the CAA requires a regulation to be issued. Specifically,
it is the Board's considered judgment, based on the information
available to it at the time of promulgation of these regulations,
that, with the exception of regulations adopted and set forth herein,
there are no other "substantive regulations promulgated by
the Secretary of Labor to implement the statutory provisions referred
to in subsection (a) [of section 205 of the CAA]."
In promulgating these regulations, the Board
has made certain technical and nomenclature changes to the regulations
as promulgated by the Secretary. Such changes are intended to make
the provisions adopted accord more naturally to situations in the
legislative branch. However, by making these changes, the Board
does not intend a substantive difference between these sections
and those of the Secretary from which they are derived. Moreover,
such changes, in and of themselves, are not intended to constitute
an interpretation of the regulation or of the statutory provisions
of the CAA upon which they are based.
These regulations establish basic definitions
and rules for giving notice, implementing the provisions of WARN.
The objective of these regulations is to establish clear principles
and broad guidelines which can be applied in specific circumstances.
However, it is recognized that rulemaking cannot address the multitude
of employing office-specific situations in which advance notice
will be given.
(c) Notice in ambiguous situations. It is civically
desirable and it would appear to be good business practice for an
employing office to provide advance notice, where reasonably possible,
to its workers or unions when terminating a significant number of
employees. The Office encourages employing offices to give notice
in such circumstances.
(d) WARN not to supersede other laws and contracts.
The provisions of WARN do not supersede any otherwise applicable
laws or collective bargaining agreements that provide for additional
notice or additional rights and remedies. If such law or agreement
provides for a longer notice period, WARN notice shall run concurrently
with that additional notice period. Collective bargaining agreements
may be used to clarify or amplify the terms and conditions of WARN,
but may not reduce WARN rights.
§639.2 What does
WARN require?
WARN requires employing offices that are planning an office closing
or a mass layoff to give affected employees at least 60 days' notice
of such an employment action. While the 60-day period is the minimum
for advance notice, this provision is not intended to discourage
employing offices from voluntarily providing longer periods of advance
notice. Not all office closings and layoffs are subject to WARN,
and certain employment thresholds must be reached before WARN applies.
WARN sets out specific exemptions, and provides for a reduction
in the notification period in particular circumstances. Remedies
authorized under section 205 of the CAA may be assessed against
employing offices that violate WARN requirements.
§639.3 Definitions.
(a) Employing office.
(1) The term "employing office" means
any of the entities listed in section 101(9) of the CAA, 2 U.S.C.
§1301(9) that employs--
(i) 100 or more employees, excluding part-time
employees; or
(ii) employs 100 or more employees, including
part-time employees, who in the aggregate work at least 4,000 hours
per week, exclusive of overtime.
Workers on temporary layoff or on leave who
have a reasonable expectation of recall are counted as employees.
An employee has a "reasonable expectation of recall" when
he/she understands, through notification or through common practice,
that his/her employment with the employing office has been temporarily
interrupted and that he/she will be recalled to the same or to a
similar job.
(2) Workers, other than part-time workers, who
are exempt from notice under section 4 of WARN, are nonetheless
counted as employees for purposes of determining coverage as an
employing office.
(3) An employing office may have one or more
sites of employment under common control.
(b) Office closing. The term "office closing"
means 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, if the shutdown
results in an "employment loss" during any 30-day period
at the single site of employment for 50 or more employees, excluding
any part-time employees. An employment action that results in the
effective cessation of the work performed by a unit, even if a few
employees remain, is a shutdown. A "temporary shutdown"
triggers the notice requirement only if there are a sufficient number
of terminations, layoffs exceeding 6 months, or reductions in hours
of work as specified under the definition of "employment loss."
(c) Mass layoff.
(1) The term "mass layoff" means a
reduction in force which first, is not the result of an office closing,
and second, results in an employment loss at the single site of
employment during any 30-day period for:
(i) At least 33 percent of the active employees,
excluding part-time employees, and
(ii) At least 50 employees, excluding part-time
employees.
Where 500 or more employees (excluding part-time employees) are
affected, the 33% requirement does not apply, and notice is required
if the other criteria are met. Office closings involve employment
loss which results from the shutdown of one or more distinct units
within a single site or the entire site. A mass layoff involves
employment loss, regardless of whether one or more units are shut
down at the site.
(2) Workers, other than part-time workers, who
are exempt from notice under section 4 of WARN are nonetheless counted
as employees for purposes of determining coverage as an office closing
or mass layoff. For example, if an employing office closes a temporary
project on which 10 permanent and 40 temporary workers are employed,
a covered office closing has occurred although only 10 workers are
entitled to notice.
(d) Representative. The term "representative"
means an exclusive representative of employees within the meaning
of 5 U.S.C. §§ 7101 et seq., as applied to covered employees
and employing offices by section 220 of the CAA, 2 U.S.C. §
1351.
(e) Affected employees. The term "affected
employees" means employees who may reasonably be expected to
experience an employment loss as a consequence of a proposed office
closing or mass layoff by their employing office. This includes
individually identifiable employees who will likely lose their jobs
because of bumping rights or other factors, to the extent that such
individual workers reasonably can be identified at the time notice
is required to be given. The term "affected employees"
includes managerial and supervisory employees. Consultant or contract
employees who have a separate employment relationship with another
employing office or employer and are paid by that other employing
office or employer, or who are self-employed, are not "affected
employees" of the operations to which they are assigned. In
addition, for purposes of determining whether coverage thresholds
are met, either incumbent workers in jobs being eliminated or, if
known 60 days in advance, the actual employees who suffer an employment
loss may be counted.
(f) Employment loss.
(1) The term "employment loss" means
(i) an employment termination, other than a discharge for cause,
voluntary departure, or retirement, (ii) a layoff exceeding 6 months,
or (iii) a reduction in hours of work of individual employees of
more than 50% during each month of any 6-month period.
(2) Where a termination or a layoff (see paragraphs
(f)(1)(i) and (ii) of this section) is involved, an employment loss
does not occur when an employee is reassigned or transferred to
employing office-sponsored programs, such as retraining or job search
activities, as long as the reassignment does not constitute a constructive
discharge or other involuntary termination.
(3) An employee is not considered to have experienced
an employment loss if the closing or layoff is the result of the
relocation or consolidation of part or all of the employing office's
operations and, prior to the closing or layoff--
(i) The employing office offers to transfer the
employee to a different site of employment within a reasonable commuting
distance with no more than a 6-month break in employment, or
(ii) The employing office offers to transfer
the employee to any other site of employment regardless of distance
with no more than a 6-month break in employment, and the employee
accepts within 30 days of the offer or of the closing or layoff,
whichever is later.
(4) A "relocation or consolidation"
of part or all of an employing office's operations, for purposes
of paragraph § 639.3(f)(3), means that some definable operations
are transferred to a different site of employment and that transfer
results in an office closing or mass layoff.
(g) Part-time employee. The term "part-time"
employee means an employee who is employed for an average of fewer
than 20 hours per week or who has been employed for fewer than 6
of the 12 months preceding the date on which notice is required,
including workers who work full-time. This term may include workers
who would traditionally be understood as "seasonal" employees.
The period to be used for calculating whether a worker has worked
"an average of fewer than 20 hours per week" is the shorter
of the actual time the worker has been employed or the most recent
90 days.
(h) Single site of employment.
(1) A single site of employment can refer to
either a single location or a group of contiguous locations. Separate
facilities across the street from one another may be considered
a single site of employment.
(2) There may be several single sites of employment
within a single building, such as an office building, if separate
employing offices conduct activities within such a building. For
example, an office building housing 50 different employing offices
will contain 50 single sites of employment. The offices of each
employing office will be its single site of employment.
(3) Separate buildings or areas which are not
directly connected or in immediate proximity may be considered a
single site of employment if they are in reasonable geographic proximity,
used for the same purpose, and share the same staff and equipment.
(4) Non-contiguous sites in the same geographic
area which do not share the same staff or operational purpose should
not be considered a single site.
(5) Contiguous buildings operated by the same
employing office which have separate management and have separate
workforces are considered separate single sites of employment.
(6) For workers whose primary duties require
travel from point to point, who are outstationed, or whose primary
duties involve work outside any of the employing office's regular
employment sites (e.g., railroad workers, bus drivers, salespersons),
the single site of employment to which they are assigned as their
home base, from which their work is assigned, or to which they report
will be the single site in which they are covered for WARN purposes.
(7) Foreign sites of employment are not covered
under WARN. U.S. workers at such sites are counted to determine
whether an employing office is covered as an employing office under
§639.3(a).
(8) The term "single site of employment"
may also apply to truly unusual organizational situations where
the above criteria do not reasonably apply. The application of this
definition with the intent to evade the purpose of WARN to provide
notice is not acceptable.
(i) Facility or operating unit. The term "facility"
refers to a building or buildings. The term "operating unit"
refers to an organizationally or operationally distinct product,
operation, or specific work function within or across facilities
at the single site.
§639.4 Who must
give notice?
Section 205(a)(1) of the CAA states that "[n]o employing office
shall be closed or a mass layoff ordered within the meaning of section
3 of [WARN] until the end of a 60-day period after the employing
office serves written notice of such prospective closing or layoff.
. ." Therefore, an employing office that is anticipating carrying
out an office closing or mass layoff is required to give notice
to affected employees or their representative(s). (See definitions
in § 639.3 of this part.).
(a) It is the responsibility of the employing
office to decide the most appropriate person within the employing
office's organization to prepare and deliver the notice to affected
employees or their representative(s). In most instances, this may
be the local site office manager, the local personnel director or
a labor relations officer.
(b) An employing office that has previously announced
and carried out a short-term layoff (6 months or less) which is
being extended beyond 6 months due to circumstances not reasonably
foreseeable at the time of the initial layoff is required to give
notice when it becomes reasonably foreseeable that the extension
is required. A layoff extending beyond 6 months from the date the
layoff commenced for any other reason shall be treated as an employment
loss from the date of its commencement.
(c) In the case of the privatization or sale
of part or all of an employing office's operations, the employing
office is responsible for providing notice of any office closing
or mass layoff which takes place up to and including the effective
date (time) of the privatization or sale, and the contractor or
buyer is responsible for providing any required notice of any office
closing or mass layoff that takes place thereafter.
(1) If the employing office is made aware of
any definite plans on the part of the buyer or contractor to carry
out an office closing or mass layoff within 60 days of purchase,
the employing office may give notice to affected employees as an
agent of the buyer or contractor, if so empowered. If the employing
office does not give notice, the buyer or contractor is, nevertheless,
responsible to give notice. If the employing office gives notice
as the agent of the buyer or contractor, the responsibility for
notice still remains with the buyer or contractor.
(2) It may be prudent for the buyer or contractor
and employing office to determine the impacts of the privatization
or sale on workers, and to arrange between them for advance notice
to be given to affected employees or their representative(s), if
a mass layoff or office closing is planned.
§639.5 When must
notice be given?
(a) General rule.
(1) With certain exceptions discussed in paragraphs
(b) and (c) of this section and in § 639.9 of this part, notice
must be given at least 60 calendar days prior to any planned office
closing or mass layoff, as defined in these regulations. When all
employees are not terminated on the same date, the date of the first
individual termination within the statutory 30-day or 90-day period
triggers the 60-day notice requirement. A worker's last day of employment
is considered the date of that worker's layoff. The first and each
subsequent group of terminees are entitled to a full 60 days' notice.
In order for an employing office to decide whether issuing notice
is required, the employing office should--
(i) Look ahead 30 days and behind 30 days to
determine whether employment actions both taken and planned will,
in the aggregate for any 30-day period, reach the minimum numbers
for an office closing or a mass layoff and thus trigger the notice
requirement; and
(ii) Look ahead 90 days and behind 90 days to
determine whether employment actions both taken and planned each
of which separately is not of sufficient size to trigger WARN coverage
will, in the aggregate for any 90-day period, reach the minimum
numbers for an office closing or a mass layoff and thus trigger
the notice requirement. An employing office is not, however, required
under section 3(d) to give notice if the employing office demonstrates
that the separate employment losses are the result of separate and
distinct actions and causes, and are not an attempt to evade the
requirements of WARN.
(2) The point in time at which the number of
employees is to be measured for the purpose of determining coverage
is the date the first notice is required to be given. If this "snapshot"
of the number of employees employed on that date is clearly unrepresentative
of the ordinary or average employment level, then a more representative
number can be used to determine coverage. Examples of unrepresentative
employment levels include cases when the level is near the peak
or trough of an employment cycle or when large upward or downward
shifts in the number of employees occur around the time notice is
to be given. A more representative number may be an average number
of employees over a recent period of time or the number of employees
on an alternative date which is more representative of normal employment
levels. Alternative methods cannot be used to evade the purpose
of WARN, and should only be used in unusual circumstances.
(b) Transfers.
(1) Notice is not required in certain cases involving
transfers, as described under the definition of "employment
loss" at § 639.3(f) of this part.
(2) An offer of reassignment to a different site
of employment should not be deemed to be a "transfer"
if the new job constitutes a constructive discharge.
(3) The meaning of the term "reasonable
commuting distance" will vary with local conditions. In determining
what is a "reasonable commuting distance," consideration
should be given to the following factors: geographic accessibility
of the place of work, the quality of the roads, customarily available
transportation, and the usual travel time.
(4) In cases where the transfer is beyond reasonable
commuting distance, the employing office may become liable for failure
to give notice if an offer to transfer is not accepted within 30
days of the offer or of the closing or layoff (whichever is later).
Depending upon when the offer of transfer was made by the employing
office, the normal 60-day notice period may have expired and the
office closing or mass layoff may have occurred. An employing office
is, therefore, well advised to provide 60-day advance notice as
part of the transfer offer.
(c) Temporary employment.
(1) No notice is required if the closing is of
a temporary facility, or if the closing or layoff is the result
of the completion of a particular project or undertaking, and the
affected employees were hired with the understanding that their
employment was limited to the duration of the facility or the project
or undertaking.
(2) Employees must clearly understand at the
time of hire that their employment is temporary. When such understandings
exist will be determined by reference to employment contracts, collective
bargaining agreements, or employment practices of other employing
offices or a locality, but the burden of proof will lie with the
employing office to show that the temporary nature of the project
or facility was clearly communicated should questions arise regarding
the temporary employment understandings.
§639.6 Who must receive
notice?
Section 3(a) of WARN provides for notice to each representative
of the affected employees as of the time notice is required to be
given or, if there is no such representative at that time, to each
affected employee.
(a) Representative(s) of affected employees.
Written notice is to be served upon the chief elected officer of
the exclusive representative(s) or bargaining agent(s) of affected
employees at the time of the notice. If this person is not the same
as the officer of the local union(s) representing affected employees,
it is recommended that a copy also be given to the local union official(s).
(b) Affected employees. Notice is required to
be given to employees who may reasonably be expected to experience
an employment loss. This includes employees who will likely lose
their jobs because of bumping rights or other factors, to the extent
that such workers can be identified at the time notice is required
to be given. If, at the time notice is required to be given, the
employing office cannot identify the employee who may reasonably
be expected to experience an employment loss due to the elimination
of a particular position, the employing office must provide notice
to the incumbent in that position. While part-time employees are
not counted in determining whether office closing or mass layoff
thresholds are reached, such workers are due notice.
§639.7 What must
the notice contain?
(a) Notice must be specific.
(1) All notice must be specific.
(2) Where voluntary notice has been given more
than 60 days in advance, but does not contain all of the required
elements set out in this section, the employing office must ensure
that all of the information required by this section is provided
in writing to the parties listed in § 639.6 at least 60 days
in advance of a covered employment action.
(3) Notice may be given conditional upon the
occurrence or nonoccurrence of an event only when the event is definite
and the consequences of its occurrence or nonoccurrence will necessarily,
in the normal course of operations, lead to a covered office closing
or mass layoff less than 60 days after the event. The notice must
contain each of the elements set out in this section.
(4) The information provided in the notice shall
be based on the best information available to the employing office
at the time the notice is served. It is not the intent of the regulations
that errors in the information provided in a notice that occur because
events subsequently change or that are minor, inadvertent errors
are to be the basis for finding a violation of WARN.
(b) As used in this section, the term "date"
refers to a specific date or to a 14-day period during which a separation
or separations are expected to occur. If separations are planned
according to a schedule, the schedule should indicate the specific
dates on which or the beginning date of each 14-day period during
which any separations are expected to occur. Where a 14-day period
is used, notice must be given at least 60 days in advance of the
first day of the period.
(c) Notice to each representative of affected
employees is to contain:
(1) The name and address of the employment site
where the office closing or mass layoff will occur, and the name
and telephone number of an employing office official to contact
for further information;
(2) A statement as to whether the planned action
is expected to be permanent or temporary and, if the entire office
is to be closed, a statement to that effect;
(3) The expected date of the first separation
and the anticipated schedule for making separations;
(4) The job titles of positions to be affected
and the names of the workers currently holding affected jobs.
The notice may include additional information useful to the employees
such as information on available dislocated worker assistance, and,
if the planned action is expected to be temporary, the estimated
duration, if known.
(d) Notice to each affected employee who does
not have a representative is to be written in language understandable
to the employees and is to contain:
(1) A statement as to whether the planned action
is expected to be permanent or temporary and, if the entire office
is to be closed, a statement to that effect;
(2) The expected date when the office closing
or mass layoff will commence and the expected date when the individual
employee will be separated;
(3) An indication whether or not bumping rights
exist;
(4) The name and telephone number of an employing
office official to contact for further information.
The notice may include additional information
useful to the employees such as information on available dislocated
worker assistance, and, if the planned action is expected to be
temporary, the estimated duration, if known.
§639.8 How is the
notice served?
Any reasonable method of delivery to the parties listed under §
639.6 of this part which is designed to ensure receipt of notice
of at least 60 days before separation is acceptable (e.g., first
class mail, personal delivery with optional signed receipt). In
the case of notification directly to affected employees, insertion
of notice into pay envelopes is another viable option. A ticketed
notice, i.e., preprinted notice regularly included in each employee's
pay check or pay envelope, does not meet the requirements of WARN.
§639.9 When may notice
be given less than 60 days in advance?
Section 3(b) of WARN, as applied by section 205 of the CAA, sets
forth two conditions under which the notification period may be
reduced to less than 60 days. The employing office bears the burden
of proof that conditions for the exceptions have been met. If one
of the exceptions is applicable, the employing office must give
as much notice as is practicable to the union and non-represented
employees and this may, in some circumstances, be notice after the
fact. The employing office must, at the time notice actually is
given, provide a brief statement of the reason for reducing the
notice period, in addition to the other elements set out in §
639.7.
(a) The "unforeseeable business circumstances"
exception under section 3(b)(2)(A) of WARN, as applied under the
CAA, applies to office closings and mass layoffs caused by circumstances
that were not reasonably foreseeable at the time that 60-day notice
would have been required.
(1) An important indicator of a circumstance
that is not reasonably foreseeable is that the circumstance is caused
by some sudden, dramatic, and unexpected action or condition outside
the employing office's control.
(2) The test for determining when circumstances
are not reasonably foreseeable focuses on an employing office's
business judgment. The employing office must exercise such reasonable
business judgment as would a similarly situated employing office
in predicting the demands of its operations. The employing office
is not required, however, to accurately predict general economic
conditions that also may affect its operations.
(b) The "natural disaster" exception
in section 3(b)(2)(B) of WARN applies to office closings and mass
layoffs due to any form of a natural disaster.
(1) Floods, earthquakes, droughts, storms, tidal
waves or tsunamis and similar effects of nature are natural disasters
under this provision.
(2) To qualify for this exception, an employing
office must be able to demonstrate that its office closing or mass
layoff is a direct result of a natural disaster.
(3) While a disaster may preclude full or any
advance notice, such notice as is practicable, containing as much
of the information required in § 639.7 as is available in the
circumstances of the disaster still must be given, whether in advance
or after the fact of an employment loss caused by a natural disaster.
(4) Where an office closing or mass layoff occurs
as an indirect result of a natural disaster, the exception does
not apply but the "unforeseeable business circumstance"
exception described in paragraph (a) of this section may be applicable.
§639.10 When may
notice be extended?
Additional notice is required when the date or schedule of dates
of a planned office closing or mass layoff is extended beyond the
date or the ending date of any 14-day period announced in the original
notice as follows:
(a) If the postponement is for less than 60
days, the additional notice should be given as soon as possible
to the parties identified in § 639.6 and should include reference
to the earlier notice, the date (or 14-day period) to which the
planned action is postponed, and the reasons for the postponement.
The notice should be given in a manner which will provide the information
to all affected employees.
(b) If the postponement is for 60 days or more,
the additional notice should be treated as new notice subject to
the provisions of §§ 639.5, 639.6 and 639.7 of this part.
Rolling notice, in the sense of routine periodic notice, given whether
or not an office closing or mass layoff is impending, and with the
intent to evade the purpose of the Act rather than give specific
notice as required by WARN, is not acceptable.
§639.11 Duration
of Interim Regulations
These interim regulations for the House, the Senate and the employing
offices of the instrumentalities are effective on January 23, 1996
or on the dates upon which appropriate resolutions are passed, whichever
is later. The interim regulations shall expire on April 15, 1996
or on the dates on which appropriate resolutions concerning the
Board's final regulations are passed by the House and the Senate,
whichever is earlier.
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