Party City recently announced that it was closing all of its stores and going out of business. So what does this mean for the employees at over 800 stores that are being shut down? Are they entitled to severance? Can an employer just shut its doors without notice?
The federal Worker Adjustment Retraining Notification Act, commonly called the WARN Act, provides workers some rights in the face of mass layoffs or plant closings. In 1988, Congress passed the WARN Act to provide workers with sufficient time to prepare for the transition between the jobs they currently hold and new jobs. The WARN Act requires employers to provide written notice at least 60 calendar days in advance of covered plant closings and mass layoffs. Failure to provide the 60 days' notice subjects the employer to liability to each affected employee for an amount equal to back pay and benefits for the period of the violation, up to 60 days.
Not all layoffs fall under the WARN Act. A WARN notice is required only if a company with 100 or more full-time employees is laying off at least 50 individuals at a single employment site, or if it employs 100 or more workers who collectively work at least 4,000 hours per week. A layoff is considered a "mass layoff" if it does not stem from a plant closing and results in an employment loss at a single site during any 30-day period for 50-499 employees, provided they constitute at least 33% of the total active workforce (excluding part-time employees), or for 500 or more employees (excluding part-time employees). A plant closing refers to the permanent or temporary closure of a single employment site, or one or more facilities or operating units within a site, if the closure leads to an employment loss for 50 or more employees (excluding part-time employees) at the site within any 30-day period.
There are three exceptions to the requirement of providing a full 60-day notice. First, if a company is actively seeking capital or business before a plant closing and genuinely believes that giving advance notice would hinder its ability to secure such capital or business, and if this new capital or business would enable the employer to avoid or delay a shutdown for a reasonable time; second, if the closing or mass layoff is due to business circumstances that were not reasonably foreseeable at the time when a 60-day notice would have been necessary; or third, if a plant closing or mass layoff directly results from a natural disaster like a flood, earthquake, drought, storm, tidal wave, or similar natural events. In such cases, notice may be provided after the event.
So if an employer covered by the WARN Act closes its doors, it is required to give its employees at least 60 days notice. Otherwise it is liable to pay the employees up to 60 days' pay and benefits. If you have lost your job due to a mass layoff or plant closing and did not receive the required WARN notice, call the Law Offices of Anthony J. Pantuso, III at 203-726-0284.
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