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- @083 CHAP 5
-
- ┌──────────────────────────────────────────────┐
- │ PLANT CLOSINGS, LAYOFFS: REQUIRED NOTICES │
- │ BY EMPLOYERS TO EMPLOYEES UNDER "WARN" ACT │
- └──────────────────────────────────────────────┘
-
- For a business that has 100 or more full-time employees (or
- the equivalent, based on 40 hour work weeks) at a single
- location, you may be subject to the potentially onerous
- provisions of the "Plant Closing" law that was enacted by
- Congress in 1988 and which went into effect early in 1989.
- @IF000xx](Since your firm currently has no employees, these require-
- @IF000xx]ments are of no concern to @NAME.)
- @IF099xx]Since your firm currently has only @EMP employees, these pro-
- @IF099xx]visions don't apply to @NAME.
- @IF100xx]Your company has @EMP employees in total. If at least 100 of
- @IF100xx]your full-time employees (or the equivalent) work at a single
- @IF100xx]location, these stringent new provisions, as described below,
- @IF100xx]will very likely apply to @NAME.
-
- This legislation, called the "WARN" Act (Worker Adjustment
- and Restraining Notification Act), would affect you if you
- laid off 50 or more employees, or one-third of the work
- force, in a 30-day period. It applies to virtually any plant
- closing or major layoff for any reason, with a few obvious
- exceptions (such as for an earthquake or flood, or a labor
- dispute such as a strike or lockout, for which no notice
- need be given).
-
- A "layoff" under this Act includes any of the following:
-
- . A permanent termination of employment;
-
- . A layoff of an employee for more than six months; or
-
- . A loss of half the employees' working hours for six
- consecutive months;
-
- In case of any major layoff or shutdown, the law requires
- you to give at least 60 days advance notice. If you give
- less than that, you are required to pay the laid-off wor-
- kers for 60 days minus the actual number of days' notice
- you gave. The law requires you to notify the labor union
- that represents the employees, or, if none, the individual
- employees by mailing the notice to their last known address
- or including it in their pay envelope. You must also not-
- ify the local city or county government and state labor
- agency of the planned shutdown or cutback.
-
- @CODE: CA
- For example, you would be required to notify the Employment
- Development Department, in the case of a shutdown or layoff
- in California.
-
- @CODE:OF
- The WARN Act doesn't generally PROHIBIT a company from mak-
- ing layoffs or shutting down a money-losing plant, but it
- makes it more costly for the employer to do so, and also
- gives local unions and politicians time to find some way to
- attempt to coerce a company into maintaining an antiquated
- facility that is no longer economically viable. Count on
- being on the local 6:00 news if you try to shut down your
- business or part of it, if you have become a major local
- employer.
-
- The WARN law does impose stiff restrictions on a firm's ab-
- ility to sell off, reorganize, merge or consolidate opera-
- tions, if such a decision would adversely affect the jobs
- of 50 or more employees. In other words, if your Japanese
- competition renders your plant obsolescent, you may not be
- allowed to sell it off to a competitor if doing so would
- cost 50 or more employees their jobs. If not, it appears
- that your only option would be to simply board up the plant
- and go broke. Despite the claim by its sponsors that WARN
- would somehow make American business more competitive
- against foreign competition, it seems that it has made it
- much more costly to take a risk on building a plant in the
- U.S., since if it fails you may have to go down the tubes
- with it, rather than restructuring or selling it off.
-
- The unintended consequence of this supposed "job-saving"
- legislation (which, coincidentally, was timed to invite
- Reagan's veto just before the 1988 elections), will be to
- make any employer think long and hard about hiring more
- employees, and to start trying to find a way to automate
- every phase of its business. In effect, the government has
- taken the first major step towards West German-style social
- legislation, requiring that companies who hire employees
- must hire them for life, regardless of whether the business
- remains viable. In short, like West German employers have
- learned to do for years, you must become very careful about
- hiring employees if your business is subject to the WARN
- provisions, since you may be hiring them for life. In
- Germany, the result has been virtually zero growth in the
- number of jobs in the last decade or more, despite a very
- prosperous economy. Of course, that could never happen
- here....
-
- This new law should create a great deal of employment for
- lawyers, however, if that is any consolation. There has
- already been a great deal of litigation over what does and
- does not constitute a mass layoff or shutdown under WARN.
- It's an ill wind that blows no one some good....
-
- @CODE: ME HI
- Note that a plant closing law similar to the federal law
- has been enacted also by @STATE.
-
-