Employers that are planning a mass layoff of workers or are preparing to shut their business down must provide advanced notice to workers and other interested parties, if they employ a sufficient number of full-time workers.
Here we briefly touch on the federal and state requirements for layoffs and plant closures under the Worker Adjustment and Retraining Notification (WARN) Act.
The WARN Act applies to employers of 100 or more full-time employees. Employers with fewer employees are encouraged to comply with the spirit of the law, although they are not bound by it.
The federal law requires employers to provide 60 days‘ notice to several parties before ordering a plant closing or massive layoff. These include:
- Affected employees or their collective bargaining representative
- The state dislocated worker unit and its rapid response team (located at DEED)
- The chief elected official of the unit of local government in which the business is located. If the firm is situated in more than one locality, notice must be given to the local governmental unit to which the employer pays the highest taxes.
Employers who violate the law may be liable to employees for back pay and benefits for which they would have been eligible under an employee benefit plan. An employer who fails to notify the local governmental unit of the plant closing may be liable for a civil penalty of up to $500 per day of violation.
Minnesota law requires all employers who must provide notice under WARN to notify DEED's dislocated worker unit with the names, addresses and occupations of the employees whose jobs will be terminated.
The law encourages, but does not mandate, businesses that are considering a plant closing, substantial layoff or relocation of operations outside Minnesota to give early notice of that decision to DEED, the affected employees, any collective bargaining agent representing the employees, and the local government unit in which the establishment is located. This notice is in addition to any notice required by WARN.
The law directs DEED to establish a program to help employers, employees and the community to respond quickly to the plant closing or layoff by providing information and technical assistance for dislocated workers. The law also provides information and technical assistance on accessing public and private services and programs for dislocated workers and establishes a grant program for examining the feasibility of alternatives to the plant closing. The Dislocated Worker Program is funded by a special payroll assessment that is paid with unemployment insurance taxes.
A new law provides employers facing economic hardship with an alternative to laying off their employees by participating in a shared work plan with DEED.
Under Minnesota law, employers must notify employees and job applicants that the company has filed a petition for bankruptcy or has had an involuntary bankruptcy petition filed against it. Failure to provide the required notice is a misdemeanor.
Consultants at our Small Business Assistance Office can help you understand more about all the factors you'll need to know about mass layoffs and plant closings. And our network of Small Business Development Centers has experts located in nine main regional offices and several satellite centers statewide.
Our Guide to Starting a Business in Minnesota covers this and An Employer's Guide to Employment Law Issues in Minnesota provide a deeper look at this and other issues that commonly arise in the workplace.