I’ve spent yesterday and today researching WARN, the Worker Adjustment and Retraining Notification Act in its federal and state forms.
Now I’m all in favor of the worker, the bedrock of our society. But, you knew there was a but, right?
Putting it overly simplistically, the statute says that companies of a certain size (100 employees for the feds, 75 for the state) can’t lay off more than a third of their workers at any given location unless they give sixty days notice and the workers get pay, benefits, FICA and so on during the notice period.
So say you wanted to lay off 50 people because you don’t have anything for them to do and each of them makes an average of $700 a week, call it $1,000 with fringes. You are going to spend $200,000 to do it at a point when you are losing money, the reason you want to lay them off in the first place. (A good number of the court decisions about the statute are from bankruptcy court, which should tell you something about the statute’s effect on companies that fall victim to its provisions.)
And that catchy statute name with the word retraining in it? Nothing in the statute deals with retraining workers. The “adjustment” seems to be that the company, rather than the government, is paying unemployment benefits, for the first sixty days.