employers beware: Risks of downsizing involving a remote workforce | Polsinelli

Employers contemplating a downsizing involving remote workers may be subject to the Worker Adjustment and Retraining Notification Act (the “WARN Act”) (29 USC §2100 and. after.) and the corresponding national regulations. The WARN Act applies to employers with at least 100 full-time workers or 100 full-time and part-time workers who work a total of at least 4,000 hours per week. It is triggered when at least 50 full-time workers representing at least one-third of the full-time workforce of a “single job site” experience job loss. In general, the WARN Act requires an employer to provide 60 days written notice of a plant closure or mass layoff to nonunion workers, union representatives, and certain government officials involved.

With respect to remote workers, the U.S. Department of Labor recently released guidance stating that a “single job site” is the location “to which they are assigned as their home base, from which their work is affected or to which they relate”. So if an employer has a single physical office in, say, Chicago with 25 full-time in-person workers, but also has 100 full-time remote workers who all report to that office, the WARN Act would be triggered if the l employer reduced 45 remote workers, despite none of the in-person workers in the Chicago office being affected.

In addition to federal WARN law, employers conducting downsizing involving remote workers may be subject to state mini-WARN laws. For example, Illinois has an unforeseeable business circumstance exception to the written notification requirements, but the state Department of Labor must first determine the applicability of this exception. See 820 ILCS 65/15. This is important because it may require an employer to delay sending the written notice under the WARN Act until the state determines whether the exception under its law applies. Besides Illinois, the following states also have mini-WARN laws: California, Connecticut, Delaware, Florida, Georgia, Hawaii, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New York , North Dakota, Ohio, Oregon, Tennessee, Vermont and Wisconsin.

The law on workforce reductions concerning teleworkers is in its infancy and there will be many disputes relating to it.

Michael A. Bynum