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January 12, 2009
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The WARN Act (Worker Adjustment and Retraining Notification Act) specifies that 60 days' notice must be given in firms with more than 100 full-time employees when large-scale layoffs are going to take place. The act kicks in when 50 employees at one location are laid off within a 30-day period, or when 33 percent of the workfoce is laid off, or when 500 employees are laid off (regardless of the percentage of the workforce).
However--and there are a lot of howevers in WARN--the window extends to 90 days when the layoffs are staggered but reach those same thresholds in combination. ("Caught you trying to cheat!" is the emphasis here.)
Here's another however: WARN defines full-time employees as those who have averaged at least 20 hours per week in six of the past 12 months, or another definition--if the entire workforce averages 4,000 hours per week excluding overtime.
I bring this up for a couple of reasons. One is that the incoming Obama administration has been loud about extending the 60-day notification to 90 days. The other is that just this week one union at Republic Windows and Doors in Chicago (remember the showdown over WARN during that factory shutdown?) filed suit to force the owners to return equipment to the Chicago site that was reportedly relocated before closing.
Now, here's the interesting part: The union alleges that Republic's owners ferreted away the machinery in the middle of the night to a location in Indiana, where they intended to set up new, non-union operations, and then told the workers that the Chicago firm was shutting down because Bank of America wouldn't extend them a line of credit.
If this is true, it brings to light a fascinating new wrinkle and shows that Republic did indeed scheme to avoid WARN.
In the end, to avoid a public relations nightmare, BofA forked over about $1.5 million to Republic, and the workers received 60 days of pay and benefits.
Which brings up the final point: There's no way an employer would want dozens of laid-off workers sitting around the workplace for 60 days while knowing they're getting the axe. It's doubtful they'd do much constructive work, and it's likely that pilferage and sabotage would take place. Pay them 60 days' worth and see them off.
So, if the Obama team manages to up the WARN stakes, many companies will face paying three months of wages and benefits just to downsize in an effort to survive in tough economic times.
Better to gid rid of them now! LOL Just kidding, of course.
