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.