Although virtually all workers at covered employers – hourly, salaried, and managerial workers – were entitled to notice, employer coverage was quite restricted. Private and not-for-profit employers were covered if they had one hundred or more workers, but employees were excluded from that count if they had worked for fewer than six months in the past year or fewer than twenty hours per week on average. That meant that a large number of small businesses were not required to provide advance notice of layoffs or closings.
The definition of plant closing and mass layoff also left many potential company decisions involving large employment cuts outside the targeted transparency system’s disclosure requirement. A covered employer was required to provide advance notice if an impending shutdown would lead to a loss of 50 or more workers in a thirty-day period. Mass layoff was defined nar rowly as reducing employ ment at any site of 500 or more workers or laying off 50–499 workers if that number represented at least a third of the workforce. 197 In addition, covered employers were not required to provide advance notice for a variety of “unforeseeable” business reasons, for natural disasters, or where it could be shown that even the sixty-day disclosure would cause irreparable harm to the business’s viability. 198
The law did not provide an extensive apparatus for implementation. Unlike most federal workplace policies, the advance notice requirement did not vest a particular division of the U.S . Department of Labor with authority to investigate or enforce the law. Enforcement was provided instead through lawsuits lodged in federal courts by workers, their representatives (if any), and/or local governments. An employer found in violation of the disclosure requirement could be required to pay the affected workers back pay and benefits for the period when notice was not provided (up to sixty days). Employers were also subject to civil penalties of up to five hundred dollars for each day of violation. Companies were left with considerable discretion concerning the means by which they would notify workers and communities. The law did not provide a notification format or indicate through whom (union officers or other representatives) workers would be contacted or the “local community” informed. 199
The combination of restrictive employer coverage and the rather narrow definition of plant closings and mass layoffs has meant that a relatively small percentage of layoffs has been covered by the disclosure policy’s requirements. In an early study of the requirement’s impact, Ehrenburg and Jakubson concluded that although compliance with the policy was high, “WARN does not affect a substantial proportion of permanently laid off workers.” 200 That conclusion was still valid in 2006, given the large percentage of the workforce employed in workplaces with fewer than a hundred workers and the fact that the vast majority of employment reductions (even in large workplaces) do not fall within the narrow definitions of employment loss described in the regulation. 201
Disclosure provisions for plant closings and layoffs have not changed substantially since their initial approval, although several recent events have led Congress to consider expanding or modifying disclosure. Following the terrorist attacks on the United States in 2001, Congress held hearings about the significant employment dislocations associated with those attacks – particularly in the hotel and hospitality industries – which led some in Congress to call for expanding the reach of the disclosure policy. 202 In 2004, high-profile instances of “offshoring” work to India and China led the Senate to consider expanding the transparency rules’ definition of employment loss. 203 As of 2006, however, neither of these efforts had led to changes in the law.
