WASHINGTON, D.C.— U.S. Sen. Sherrod Brown (D-OH) and Representatives George Miller (D-CA), Chairman of the U.S. House Education and Labor Committee, and John McHugh (R-NY) introduced legislation today that would strengthen the law requiring employers to notify workers and communities of mass layoffs or plant closings. The bipartisan Federal Oversight, Reform, and Enforcement of the WARN (FOREWARN) Act, would strengthen enforcement of current law and close loopholes in the Worker Adjustment and Retraining Notification (WARN) Act.
The legislation is cosponsored by Sens. Richard J. Durbin (D-IL), Russ Feingold (D-WI), Tom Harkin (D-IA), and John F. Kerry (D-MA).
“Mass layoffs send shockwaves through individual households and entire communities,” U.S. Sen. Sherrod Brown said. “This bill is about protecting workers and helping communities respond to mass layoffs. The WARN Act was supposed to give employees time to find a new job. Unfortunately, fair notice has become the exception not the rule. This bill will modernize the WARN Act by closing loopholes and strengthening its enforcement. Workers and communities should be armed with best arsenal of protective measures during these challenging economic times.”
“Workers deserve more than just a pink slip when they lose their job because of our nation’s economic difficulties,” said U.S. Rep. George Miller (D-Calif.), chairman of the House Education and Labor Committee. “Current protections for workers being laid off are both confusing and rarely enforced. While an early warning may not save their job, a meaningful early notice will help them prepare to find a new job or upgrade their skills for new employment.”
“Across our country, communities and families have been devastated by mass layoffs. We have seen this acutely in Northern and Central New York and know all too well the lasting and fundamental impacts mass layoffs and plant closures have on individuals, families, and communities. In the two decades since the WARN Act was enacted, our nation’s economy has changed markedly,” said U.S. Rep. John McHugh. “It is time to modernize the WARN Act to fit today’s economy, and thereby ensure workers and communities get the fair notice they deserve and need to prepare and adjust to their change in job status. Thus, I am pleased to have had the opportunity to work with Chairman Miller and Senator Brown to develop the Forewarn Act.”
“The tough economy is forcing communities to make difficult adjustments in the face of plant closings or mass layoffs,” said U.S. Sen. Russ Feingold. “But current law meant to help workers and communities in these situations is riddled with loopholes. That is why I am pleased to cosponsor the FOREWARN Act, which would eliminate many of these loopholes, improve enforcement, and help ensure workers and communities are adequately warned when businesses decide to close a work site. This legislation will help protect hardworking Americans and help our communities better prepare for the impact of layoffs.”
“It is wrong that too many workers are laid off without warning, without the necessary time to plan, to seek new jobs, career counseling and retraining,” said U.S. Sen. Tom Harkin. “There is no such thing as a good time to learn of a layoff, but it is crucial, particularly during these difficult economic times, that we expand the WARN Act to ensure workers and their families have the necessary notice and time to plan.”
Over the past several months, laid-off employees have filed lawsuits over violations of the WARN Act against companies as varied as Lehman Brothers, retailers like Sam’s Club and Goody’s, the electronics chain Tweeter, ABX Air, USA Jet Airlines, and major law firms.
Congress passed the WARN Act in 1988 to give workers and communities 60 days advance notice to adjust to an impending “plant closing” or “mass layoff.” Compelling evidence demonstrated that retraining and other readjustment efforts have the greatest success when advance notice is provided.
The WARN Act’s effectiveness has been undermined by existing loopholes and weak enforcement. First, the WARN Act only covers 24 percents of all layoffs, according to a report by the by the Government Accountability Office (GAO). Of those layoffs, employers only provided notice approximately one-third of the time. The WARN Act has several exceptions that employers can invoke— both legitimately and illegitimately— including unforeseen business circumstances and whether a company is trying to attract capital to avoid a shutdown. Furthermore, the WARN Act is only invoked at companies with at least 100 employees that layoff 33 percent or more of their workforce.
Second, weak penalties and enforcement measures may prevent employers from providing notice. GAO found that employers failed to provide notice to employees in two-thirds of layoffs and closures where the WARN Act applied. The WARN Act requires violating employers to pay an employee a day’s pay for every day of notice not provided and does not provide the federal government the authority to enforce workers’ rights.
The FOREWARN Act would give the U.S. Department of Labor (DOL) the authority to enforce the WARN Act, and would increase penalties for violation to double back pay. In addition, it would reduce the mass layoff figure from 50 to 25, reduce the employer size from 100 to 75 employees, and lower the mass layoff trigger. The lower thresholds would protect employees in both manufacturing and services firms. It would also lengthen the notification period from 60 to 90 days and require employers to provide written notification to the Department of Labor that includes the reason for the plant closing or mass layoff, whether the employer has jobs elsewhere, and a statement of each employee’s right to wages and benefits. The bill would also expand recipients of notification to Secretary of Labor, elected officials including the governor, member(s) of Congress, and state representatives, and the appropriate labor union(s) when applicable.