Washington Gov. Bob Ferguson on May 13 signed the Securing Timely Notification and Benefits for Laid-Off Employees Act into law. Effective July 27, this statute mirrors the federal Worker Adjustment and Retraining Notification (WARN) Act, establishing notice requirements for certain business closures and mass layoffs in Washington.
Here’s what employers need to know.
Who’s Covered?
- Employers with 50 or more employees in Washington, excluding part-time workers – but does not extend to state and local governments or political subdivisions.
- All Washington employees, including part-time employees.
Covered Events
- “Business closings,” which are defined as the permanent or temporary shutdown of a single site of one or more facilities or operating units that results in an employment loss for 50 or more employees – excluding part-time employees.
- “Mass Layoffs,” which are defined as reductions in force (unrelated to a business closing) that result in 50 or more employment losses within a 30-day period – excluding part-time employees.
An employment loss is defined as: (1) a termination – excluding for-cause terminations, retirements and voluntary resignations; (2) a layoff exceeding six months; or (3) a 50% or more reduction in hours of an individual employee during a six-month period.
A "single site of employment" is a single location or group of contiguous locations, such as a group of structures that form a campus or business park or separate facilities across the street from each other.
Notice Requirements
Employers must provide at least 60 days’ written notice before initiating a business closing or mass layoff. Notice must be provided to the Washington Employment Security Department (ESD) and to affected employees (or their bargaining representative, if unionized) and must include the following, in addition to notice contents required under the federal WARN Act:
- The name and address of the employment site where the business closing or mass layoff will occur;
- The name and contact information of a company official to contact for further information;
- A statement of whether the planned action is expected to be permanent or temporary;
- If the planned action is expected to be temporary, the statement must also include whether the planned action is expected to last longer or shorter than three months;
- If the entire business is to be closed, a statement to that effect;
- The expected date of the first employment loss and the anticipated schedule for employment losses;
- The job titles of positions to be affected and the names of the employees currently holding the affected jobs;
- The notice to the ESD must also include the addresses of the affected employees; and
- Whether the mass layoff or business closing is the result of, or will result in, the relocation or contracting out of the employer's operations or the affected employees' positions.
In the case of the sale of part or all of a business, the seller is responsible for providing notice of any covered event which will take place up to and on the effective date of the sale. Conversely, the buyer would be responsible for providing notice of any covered event that would take place thereafter.
Unlike the federal WARN Act, the Washington statute does not require notice to be given to the chief elected official of the unit of local government in which the layoff or closing will occur – though this may still be required in instances where both federal and Washington law applies.
Exceptions
Exemptions from the Washington statute’s notice requirements exist:
- Where an employer is actively seeking capital or business that could prevent the employer from taking the contemplated action and believes that notice would jeopardize those efforts;
- Where there are unforeseeable business circumstances that which must be caused by a sudden, dramatic and unexpected action or condition outside of the employer's control;
- In the event of a natural disaster (flood, earthquake, drought, storm, tornado, etc.); and
- In the case of construction industry projects: (1) where employees are hired under temporary employment arrangements which were communicated to employees upon hire, or (2) in the case of multi-employer construction project, where the only affected employees are subject to a full union referral or dispatch system.
Significantly, employees on paid family or medical leave under Washington's paid family and medical leave law cannot be included in a mass layoff unless an exemption applies.
Documentation is required to invoke any exception but what constitutes suitable documentation under the statute is not yet defined.
Enforcement and Penalties
Failure to comply with the law can result in stiff penalties. Aggrieved employees may recover backpay for up to 60 days and the value of lost benefits. Employers may also be subject to a civil penalty of up to $500 per day for failing to notify the ESD, subject to certain exceptions such as if employees are made whole within three weeks of the layoff.
Conclusion
Washington joins a growing list of states seeking to expand the federal WARN Act’s notice obligations to a broader swath of employers. Employers should consult with counsel to ensure compliance with federal law, if applicable, in addition to the Washington statute and other varying state-level WARN acts that often differ in the events triggering notice requirements, the employees who must be counted and how far in advance notice must be delivered to affected employees.
Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. The author has provided the links referenced above for information purposes only and by doing so, does not adopt or incorporate the contents. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.
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