Factory Closings Leaving Workers Unemployed

factory closingsFactory closings or mass layoffs? Are you a factory worker who showed up to work one day only to be pink slipped on the spot because the factory shut down? Be advised that there are both state and federal protections for workers just like you. A local employment attorney can help you to understand your rights and ensure that you receive the protections to which you are entitled. When those protections are denied, you may find recourse in the courts.

Factory Closings and The Federal Worker Adjustment and Retraining Notification (WARN) Act

The federal WARN Act has been around since 1989, and requires employers to give workers a minimum of 60 days written notice prior to a covered plant closing or major layoff. Notice must be given directly to impacted workers or to their union representatives.

Factory Closings and What Constitutes a Covered Plant?

WARN regulations apply to businesses that employ 100 employees or more, not including those who work less than 20 hours per week or temporary employees who have worked less then half of the previous year.  These expectations apply to public and private employers, as well as non-profits and quasi-public employers. Exemptions are allowed when temporary plants are closed, or when workers were hired with the understanding that the job was temporary and factory closings are due to a specific project being completed. Also excepted are local, state, and federal entities that provide public services. When layoffs, relocation of more than 100 miles, or a plant closing affects one-third of the workforce and that number includes 50 or more workers, notice must be provided.

Three other exceptions exist:

  • Faltering Company: When a company is seeking capital or new business to stay open, and notice would eliminate or drastically limit opportunities;
  • Unforeseen Circumstances: When circumstances surrounding the business have changed dramatically and were not reasonably foreseeable;
  • Natural Disaster: When a natural disaster such as an earthquake leads to the closing or layoff.

California’s WARN Act is Even More Strict

For California workers, state regulations are even tighter. Companies with at least 75 employees, either part- or full-time, are included as covered employers. When a business closes or significantly reduces operations in such a way that 50 or more workers are impacted over a 30-day window, employees must be notified.

Penalties for Non-compliance

Employers who fail to comply with WARN Act regulations face several penalties:

  • Civil fines of up to $500 per day for federal violations;
  • Civil fines of up to $500 per day for state violations;
  • Back pay for each day of WARN violations;
  • Attorney’s fees.

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