When an Indiana employer downsizes, closes a plant, conducts a mass layoff, or otherwise cuts a significant number of positions, employees have certain rights. Unfortunately, they don’t include the right to remain employed, be hired into open positions with the company, or be considered for rehire. Employers are not prohibited from letting workers go when they need to make cuts.
But the law does entitle employees to a certain amount of notice before a plant closing or large-scale layoff. If the employer fails to give the required notice, employees are entitled to damages.
These rights come from the federal Worker Adjustment and Retraining Notification (WARN) Act. Almost half of the states have similar laws; some go further to require that employers pay a small severance or continue employee health benefits for a short period after the layoff. However, Indiana is not among them: Indiana employees are protected by the federal WARN Act only.
This article provides information on the rights of Indiana employees under the federal WARN Act. See the articles at our Losing or Leaving Your Job page for information on when you should receive your final paycheck, how to continue your health benefits, and more.
WARN requires 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 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 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 layoff 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 prohibits employers from trying to get around WARN’s notice requirements by conducting a series of smaller layoffs over time.
Employees who will lose their jobs in a layoff or plant closing covered by WARN are entitled to notice 60 days in advance. (Employees who are union members don’t get individual notice; instead, the employer must notify their union representatives, 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.
There are a handful of exceptions to WARN. If one of them applies, 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. An employer who relies on one of these exceptions must give as much notice as possible. As part of the written notice requirement, the employer must state why it couldn’t give the full 60 days that would otherwise be required.
The federal Department of Labor is responsible for interpreting and explaining WARN through regulations. However, Congress didn’t authorize the agency to enforce the law, take complaints about violations, investigate potential wrongdoing, or file lawsuits on behalf of employees. Employees must file a lawsuit in federal court to assert their WARN rights.
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 25 days in advance of a layoff, employees would be entitled to 35 days of pay and benefits, unless the employer paid them severance covering that extra time.
Employers may also be ordered to pay the attorney fees and court costs of affected workers who sue and win. Employers who don’t give proper notice to the state may also have to pay fines, but this money goes to the state, not to employees.
If you believe your WARN rights have been violated, you should consult with an experienced Indiana employment lawyer. WARN includes the right to attorney fees if you win, so 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.