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If you violate the WARN Act, you must pay back pay and benefits to each affected employee for each day of the violation, up to a maximum of 60 work days.1 Benefits include contributions to the employee’s pension plan and maintenance of the employee’s welfare benefit plan. If you are self-insured, you must pay your employees the monetary equivalent of the insurance benefit. In addition, you are liable for the cost of any otherwise covered medical expense incurred during the employment loss.
Your liability can be offset by:
The amount of liability will also be reduced depending upon the amount of notice you give. For example, if you gave 20 days’ notice, you will face only 40 days of liability. In addition, you face fines of $500 per day up to a maximum of 60 days for failing to give notice to a local government unit. This penalty is not applicable if you pay each affected employee the amount for which you are liable within three weeks from the date you ordered the plant closing or layoff. Reasonable attorneys’ fees may be awarded to the party that prevails in a suit under the WARN Act.2
Employees are also entitled to compensation for tips and holiday and vacation pay they would have earned during the time for which the required WARN notice was not given. Employees must prove that they would have earned a specific amount in tips and would have worked the holidays.3
1. 29 U.S.C. 2104; Lab. Code sec. 1402
2. Lab. Code sec. 1402
3. Local Joint Exec. Bd. of Culinary/Bartender Trust Fund v. Las Vegas Sands, Inc., 244 F.3d 1152 (9th Cir. 2001)
4. UI Code sec. 1265.1