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Worker Adjustment And Retraining Notification Act

Worker Adjustment and Retraining Notification (WARN) Act

Definition

A federal act designed to allow workers additional time to seek alternative employment prior to (1) a plant closing, (2) a mass layoff, or (3) a cumulative layoff. The law applies to any private-sector or not-for-profit employer with 100 or more full-time employees and applies to both hourly and salaried employees, including those in managerial and supervisory positions. However, it does not apply to (1) employees who have worked for less than 6 months and (2) those who work less than 20 hours per week.

Many states have their own versions of the WARN Act that supersede the federal law. State versions are usually more liberal than the requirements under the federal version. For example, state versions may apply to even smaller businesses or also apply to part-time workers.

The majority of employment practices liability (EPL) policies preclude coverage for claims alleging failure to provide notice as required by the WARN Act, although most cover the defense costs associated with such allegations. The rationale for this exclusion is that such claims are within the insured's control and therefore are preventable.

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