Recently, we wrote about the notice requirements under the WARN Act for employers implementing furloughs and layoffs as a result of the COVID-19 pandemic. As the pandemic continues, employers may now face lengthened furloughs or permanent layoffs. The Department of Labor (DOL) has now revised their guidance on WARN Act notice requirements. What follows is a summary of the DOL’s updated guidance to employers on WARN Act notice requirements.

Employers needing to extend a temporary layoff or furlough beyond 6 months.

At the onset of the COVID-19 pandemic, many employers may have laid off or furloughed employees intending for the situation to be temporary, i.e., less than 6 months. As such, these temporary situations did not require the 60-day notice found in the WARN Act. However, as the climate has continually changed for businesses navigating through the pandemic, some employers may find that temporary layoffs or furloughs will extend longer than 6 months.

Under the WARN Act, a temporary layoff or furlough that lasts longer than 6 months is considered an “employment loss.” When that happens,” it violates the WARN Act unless:

1. The extension is due to business circumstances (including unforeseeable changes in price or cost) not reasonably foreseeable at the time of the initial layoff; and
2. Notice is given when it becomes reasonably foreseeable that the extension is required.

Thus, an employer who previously announced short-term or temporary layoffs and later extends the layoffs or furloughs beyond 6 months due to “business circumstances not reasonably foreseeable” at the time of the original layoff must give notice at the time it becomes reasonably foreseeable that the extension is necessary. Importantly, a layoff extending beyond 6 months for any reason other than a reasonably unforeseeable business circumstance will be treated as an employment loss subject to the 60-day notice requirement.

An important indicator of a business circumstance that is not reasonably foreseeable is that the circumstance is caused by a sudden, dramatic, and unexpected action or condition outside the employer’s control, according to the DOL. This can include:

• An unanticipated and dramatic major economic downturn;
• A government-ordered closing of an employment site that occurs without prior notice also may be an unforeseeable business circumstance; or
• Sudden, dramatic, and unexpected action outside the employer’s control, announced and implemented swiftly, such that the employer is unable to provide 60 days’ notice.

When invoking an exception to the WARN Act’s 60-day notice requirement, employers are still required to:

• Give as much notice to employees—or their representative(s)—and state and local government officials as is practicable (which may, in some circumstances, be notice after the fact); and
• Include a brief statement of the reason for giving less than 60-days’ notice, along with the other required elements of a WARN notice.

An Employer should be prepared to prove that it could not foresee the circumstances affecting the business should a WARN Act action be filed against the employer. The DOL provides that the question of foreseeability will be determined on a case-by-case basis in the courts.

Permanent layoffs and exceptions to the WARN Act because of COVID-19.

It is important for employers to review the “unforeseeable business circumstances” exception to the 60-day notice requirement found in the WARN Act. The DOL reiterates that issues concerning whether COVID-19 qualifies as an “unforeseeable business circumstance” will be decided on a case-by-case basis. Employers should not assume that COVID-19 will automatically qualify as an excuse for failing to give the 60-days’ WARN Act notice.

Giving notice to employees following closure of business.

An employer is permitted to send notice to employers by email because the business is currently closed. The DOL noted that regulations implementing the WARN Act state: “Any reasonable method of delivery … which is designed to ensure receipt of notice” is an acceptable form of notice. However, a WARN notice sent via email must still be specific to the individual employee and comply with all requirements of the WARN Act statute and regulations on written notifications.

Further, employers are permitted to issue WARN Notices by email to State Rapid Response Coordinators and Chief Elected Local Officials. However, it is recommended that the employer reach out to each office to determine their preferred method of delivery.

If you have questions about your specific circumstances as an employer, you should consult qualified employment counsel.

By Lauren R. Myers, lmyers@dsda.com