Employers that are converting furloughs into permanent layoffs need to ensure compliance with the Worker Adjustment and Retraining Notification (WARN) Act and with COBRA.
"One major misstep for employers is to assume that furloughing employees allows the employer to completely forget about the WARN Act,. For employers covered by the law, "a furlough could morph into an employment loss triggering WARN Act obligations."
Additionally,, laying off furloughed employees may result in the loss of health insurance coverage for those workers, which would subject the employer to notice requirements under COBRA.
When Does the WARN Act Apply?
The WARN Act requires covered employers to provide at least 60 calendar days’ advance written notice of a worksite closing affecting 50 or more employees, or a mass layoff affecting at least 50 employees and one-third of the worksite’s total workforce or 500 or more employees at a single employment site during any 90-day period,”
Also not all employment loss requires 60 days’ notice.
furloughs expected to last less than six months do not trigger the WARN Act. Nonetheless, “best practices would suggest that notice be given if an employer is uncertain whether a furlough will exceed six months,
§ Is terminated, other than a discharge for cause, voluntary departure or retirement.
§ Has been laid off for more than six months.
§ Suffers a reduction in hours of work of more than 50 percent during each month of any six-month period
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Bob McKenzie has over 35 years of human resources management experience. His background includes a wide range of hands-on HR practices in a variety of industries and all areas of human resource management. He started McKenzieHR, a human resources management firm in Jacksonville, Florida in 2002. Bob has been cited in a number of Human Resources trade publications. Among them are HR.com, HR Magazine, HR Florida Review, The Jacksonville Business Journal, Vault.com, BNA and the Institute of Management and Administration. He has been a speaker at a number of conferences as well as national audio and web-based seminars. He has been the keynote speaker and a guest speaker at a number of conferences and business meetings. One of his major talents is teaching HR professionals about their field. He has been facilitating a class for 12 year preparing Human Resources professionals to take and pass the HR certification exam. He is proud to say that has an 80% pass rate for first time test takers, well above the national average of 52%. Bob is a graduate of Rider University where he received a Bachelor of Science in Commerce Degree and double majored in Industrial Relations and Organizational Behavior. He is actively involved in the Small Business Resource Network and has served on the Board of Directors of a number of non-profit organizations.