DOL Issues New COVID-19-Related WARN FAQs and Updates FFCRA Q&As
The federal Department of Labor (DOL) issued new Worker Adjustment and Retraining Notification (WARN) Act COVID-19 Frequently Asked Questions and added to its extensive Questions and Answers resource for the Families First Coronavirus Response Act (FFCRA).
WARN Act and COVID-19. The DOL has provided additional guidance for employers navigating the COVID-19 pandemic, by issuing a Frequently Asked Questions resource on the Worker Adjustment and Retraining Notification (WARN) Act and COVID-19.
WARN Act Overview: The WARN Act requires employers with 100 or more full-time employees to provide at least 60 calendar days advance written notice of a worksite closing affecting 50 or more employees, or a mass layoff affecting at least 50 employees and 1/3 of the worksite’s total workforce or 500 or more employees at the single site of employment during any 90-day period.
Temporary Layoffs or Furloughs: Furloughs or layoffs of six months or longer that otherwise meet WARN requirements will trigger WARN’s 60-day notice requirement. Employers that did not issue WARN notices because they did not intend layoffs to last longer than six months may be subject to WARN liability if the layoff or furlough is extended beyond six months. According to the DOL, an employer would not incur WARN liability in this scenario if: (1) the extension beyond six months is caused by business circumstances not foreseeable at the time of the initial layoff; and (2) notice is given at the time it becomes reasonably foreseeable that a layoff beyond six months will be required.
Notably, the DOL indicates that a layoff extending beyond 6 months for any other reason is treated as an employment loss from the date the layoff or furlough starts.
Permanent Layoffs Due to COVID-19: The DOL recommended employers review the “unforeseeable business circumstances” exception to WARN’s 60 day notice requirement in assessing whether they may claim an exception for instituting permanent layoffs without providing 60 days’ notice. This exception applies if the plant closing or mass layoff was necessitated by business circumstances that were not reasonably foreseeable 60 days’ in advance of the employment action. The DOL further provided:
(1) An important indicator of a business circumstance that is not reasonably foreseeable is that the circumstance is caused by some sudden, dramatic, and unexpected action or condition outside the employer’s control. A principal client’s sudden and unexpected termination of a major contract with the employer… and an unanticipated and dramatic major economic downturn might each be considered a business circumstance that is not reasonably foreseeable. A government ordered closing of an employment site that occurs without prior notice also may be an unforeseeable business circumstance.
(2) The test for determining when business circumstances are not reasonably foreseeable focuses on an employer’s business judgment. The employer must exercise such commercially reasonable business judgment as would a similarly situated employer in predicting the demands of its particular market. The employer is not required, however, to accurately predict general economic conditions that also may affect demand for its products or services
Even if 60 days’ notice may not have been required pursuant to this exception, employers must still send WARN notices as soon as practically possible, and include a brief statement of the reason for giving less than 60 days’ notice.
WARN Notices By Email: The Department of Labor confirmed that WARN notices may be sent via email, as “[a]ny reasonable method of delivery . . . which is designed to ensure receipt of notice’ is an acceptable form of notice.” If notices are sent by email, the same requirements for the contents of the notice remain in place (found at 20 CFR 639.7).
Key Takeaways: The application of an exception to WARN’s 60-day notice requirement does not eliminate employer’s need to issue WARN notices if they otherwise meet WARN’s requirements. Even if 60 days’ notice was not required pursuant to an exception, employers must still send WARN notices for employment actions covered by one of WARN’s exceptions as soon as practically possible, even if they are issued after the employment action occurs.
Accordingly, in the event that what was initially thought to be a short term layoff may extend beyond six months, employers should not wait until 60 days prior to the end of the six month period to issue WARN notices. They must continue to monitor the layoff and analyze the likelihood of whether the layoff will last beyond six months. As soon as it becomes reasonably foreseeable that the layoff may extend beyond six months, employers should issue WARN notices as soon as possible to avoid WARN liability.
FFCRA Q&As. The additions to the DOL’s Questions and Answers resource for the Families First Coronavirus Response Act include the following:
- Detailed directions on how to compute the number of hours of emergency paid sick leave the number of expanded Family and Medical Leave Act hours that must be paid for employees with irregular hours.
- Specific guidance on how to calculate an employee’s average regular rate of pay for FFCRA paid leave purposes, including those on a fixed salary.
- Permission to round to the nearest time increment customarily used to track hours worked (e.g. tenth, quarter or half hour), when computing emergency paid sick leave or expanded Family and Medical Leave.
- Clarification that the six-month period used to calculate an employee’s regular rate is only measured once, upon the first day that the employee takes emergency paid sick leave or expanded Family and Medical Leave, even if the employee ends up taking leave in several blocks or on an intermittent basis.
- Reiteration that an employer may not require an employee to use existing paid leave concurrently with emergency paid sick leave under the FFCRA, but may require such use with expanded Family and Medical Leave. In the latter instance, the employer may only obtain tax credits for wages paid at 2/3 of the employee’s regular rate of pay up to $200 per day ($10,000 total).
- Confirmation that stay-at-home and shelter-in-place orders are the same as quarantine or isolation orders that trigger FFCRA emergency paid sick leave. The DOL emphasizes that the employee must be unable to perform available work because of the order, and that if the employer does not have work for the employee to perform because of the order, the employee may not take such leave.
Explanation that if the DOL brings an enforcement action against an employer for failure to pay the paid sick leave, the employee is entitled to recover the full amount due.