When an employer closes a plant, conducts a large layoff, downsizes, or otherwise cuts a significant number of jobs, employees in Iowa – and every other state -- have certain rights. Unfortunately, employees are not legally entitled to keep their jobs, get another position within the company, or be rehired if things turn around. No law forbids employers from laying off workers when financial times get tough.
However, in a plant closing or sizable layoff, employees have the right to a certain amount of notice and, if the employer fails to give proper notice, to limited damages. These rights come from the federal Worker Adjustment and Retraining Notification (WARN) Act. Almost half of the states have similar laws, and Iowa is one of them. Some states require that employers pay a small severance or continue employee health benefits for a short period after the layoff. Iowa has not gone this far, but does have a notice requirement, similar to WARN.
This article provides information on the rights of Iowa employees under the federal WARN Act and Iowa’s layoff law. For more information on your rights when you are laid off (including when you should receive your final paycheck, how to continue your health benefits, and more), see the articles at our Losing or Leaving Your Job page.
Only larger employers are covered by WARN, and only when a significant number of employees lose their jobs. Iowa law applies to smaller employers.
WARN requires certain larger employers to give advance notice of mass layoffs or plant closings that will result in a certain number or percentage of employees losing their jobs. Employers are covered only if they have at least 100 full-time employees or at least 100 employees who work a combined 4,000 hours or more per week. (Full-time employees are defined as those who work at least 20 hours a week and have been employed for at least six of the 12 months ending on the date when notice must be given under WARN.)
Not every job cutting action is covered by WARN. WARN applies only to plant closings and mass layoffs.
WARN also applies to plant closings or mass layoffs that occur in stages over 90 days. This rule is intended to prevent employers from getting around WARN’s notice requirements by conducting a series of smaller layoffs.
Employers are covered by Iowa’s layoff law is they have at least 25 full-time employees. Employers must give the notice required by state law if they are closing a business (shutting it down permanently or temporarily) or conducting a mass layoff that will affect 25 or more full-time employees.
If a layoff or plant closing is covered by WARN, employees who will lose their jobs are entitled to notice 60 days in advance. (Employees who are union members need not receive individual notice; instead, the employer must notify their bargaining reps, who are expected to pass the information along to the affected employees.)
The notice must provide specified information about the planned layoffs, including whether they are expected to be temporary or permanent, the expected date when the layoffs will begin and when the employee will receive a termination letter, and whether the employee will have bumping rights.
Under Iowa law, employers must give notice only 30 days in advance. (If the employer is subject to a collective bargaining agreement that requires a different amount of notice, the employer must comply with the agreement.)
In some situations, an employer either does not have to give notice at all or can give less than 60 days’ notice.
WARN does not apply – and therefore, an employer isn’t legally required to give advance notice of a mass layoff or plant closing – in these circumstances:
Employers may comply with WARN by giving as much notice as they can (even if they give less than 60 days’ notice) in a few situations. If an employer relies on one of these exceptions, it must give as much notice as possible and must state (as part of the written notice requirement) why it couldn’t give the full 60 days that would otherwise be required.
Similar exceptions apply under Iowa law. An employer is not required to give advance notice if the job losses are due to a strike or lockout, unforeseeable business circumstances; or natural disaster. Notice is also not required if the employer was seeking capital, in good faith, that would have avoided or postponed the job losses at the time when notice should have been given.
An employer who violates WARN may be ordered to pay all affected workers for all pay and benefits they lost for the period of the WARN violation, up to the full 60 days WARN requires. This amount is reduced by any wages earned or severance payments the employer made voluntarily during that time. For example, if an employer should have given 60 days’ notice, but gave notice only 40 days in advance of a layoff, employees would be entitled to 20 days of pay and benefits, unless the employer paid them severance covering that extra time.
Under Iowa law, an employer may pay employees wages in lieu of giving notice.
If you believe your rights have been violated, you should consult with an experienced Iowa employment lawyer. Because WARN allows a prevailing attorney to be awarded fees, it provides an incentive for lawyers to take strong cases. However, the damages available to any one employee are relatively low. Therefore, a lawyer may advise either trying to negotiate a settlement or going forward on behalf of all affected employees, as part of a class action lawsuit.