As employers continue to cope with the consequences of the coronavirus (COVID-19) global pandemic they may face the unfortunate decision of having to engage in mass layoffs of employees or close their business entirely. Wisconsin employers need to be aware of the requirements imposed by both state and federal law in these situations. While the law in this area is complicated by numerous exceptions based on the circumstances of the layoff and the employer type, knowing the basics can put you on alert for what further action you may be required to take.
The federal Worker Adjustment and Retraining Notification (WARN) Act requires employers with 100 or more full-time employees, excluding employees who have worked less than 6 months and those working less than 20 hours per week, to provide 60 days notice of an “employment loss” if there is a “plant closing” or a “mass layoff” impacting 50 or more employees at a single site of employment OR those who employ 100 or more workers working at least a combined 4,000 hours per week. WARN looks at the employment losses that occur over a 90-day period, thus the layoffs may be staggered to let go smaller number of employees but still require a notice. The Act effects employers who are is private for-profit business, private non-profit organization, or quasi-public entity separately organized from regular government. While the contains numerous exceptions it notably includes an exception for “an unanticipated and dramatic major economic downturn might be considered a business circumstance that is not reasonably foreseeable.” It is not known how of if this exception will be applied to COVID-19 layoffs or closings.
In Wisconsin Section 109.07 of the Wisconsin Statutes and Chapter DWD 279 of the Wisconsin Administrative Code combine to create Wisconsin’s Business Closing and Mass Layoff (WBCML) Law. The WBCML is broader than WARN and applies to employers with 50 or more employees. To be covered by the WBCML the employer must also be permanently or temporarily shutting down an employment site, facility, or operating unit within a single municipality that affects 25 or more employees OR be reducing the number of its employees by: at least 25% of its workforce or 25 employees, whichever is greater, or by at least 500 employees. THE WBCML provides exceptions for unforeseeable business circumstances and natural or man-made disasters beyond the employer’s control. However, it is not known how of if this exception will be applied to COVID-19 layoffs or closings.
The consequences of COVID-19 are an ever-developing issue with states often suspending administrative code and statutes or enacting new acts to cope with the changing climate. Some states, such as California, have already suspended their 60-day notice requirement. Wisconsin has already made adjustment to its unemployment benefits so it is possible that adjustments related to the WBCML may not be far off. Contact an attorney or see the Wisconsin Department of Workforce Development’s information on notices at:
If you plan to close your business or lay off employees to ensure you are acting in accordance with applicable law.