Employers Beware: Risks with Reductions in Force Involving a Remote Workforce
Employers considering a reduction in force involving remote workers may be subject to the Worker Adjustment and Retraining Notification Act (the “WARN Act”) (29 U.S.C. §2100 et. seq.) and corresponding state regulations. The WARN Act applies to employers with at least 100 full-time workers or 100 full-time and part-time workers who work an aggregate of at least 4,000 hours per week. It is triggered when at least 50 full-time workers comprising no less than one-third of the full-time workforce at a “single site of employment” suﬀer an employment loss. In general, the WARN Act requires an employer to provide 60 days’ advance written notice when there will be a plant closing or mass layoﬀ to impacted non-union workers, union representatives, and certain government oﬃcials.
Regarding remote workers, the U.S. Department of Labor recently published guidance stating that a “single site of employment” is the location “to which they are assigned as their home base, from which their work is assigned, or to which they report.” Thus, if an employer has a sole physical office in Chicago, for example, with 25 in-person full-time workers, but also has 100 remote full-time workers who all report to that office, the WARN Act would be triggered if the employer reduced 45 remote workers, despite the fact that none of the in-person workers in the Chicago office were impacted.
In addition to the federal WARN Act, employers conducting a reduction in force involving remote workers may be subject to mini-WARN state laws. For example, Illinois has an unforeseeable business circumstances exception to the written notice requirements, but the state’s Department of Labor must ﬁrst determine the applicability of that exception. See 820 ILCS 65/15. This is significant 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. Aside from 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 regarding reductions in force involving remote workers is in its infancy and there will be plenty of related litigation.