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Jonathan Price – CRE & Flex Expert
A surge in layoffs and growing concern over AI-driven job displacement has put renewed attention on the federal Worker Adjustment and Retraining Notification Act (WARN). In response, House Democrats have introduced the Fair Warning Act, a proposal that would significantly expand employer notice obligations for layoffs and closures.
If enacted, the bill would mark the first major rewrite of WARN since 1988 and would lower thresholds, broaden coverage, and strengthen enforcement nationwide, according to Law and the Workplace.
Broader Employer Coverage
Current WARN rules apply mainly to employers with 100 or more full-time employees. The Fair Warning Act would expand coverage to employers with 50 or more employees, including part-time workers, or those with at least $2 million in annual payroll.
The bill also broadens who qualifies as an employer. Parent companies, affiliates, and contracting firms could share responsibility if they exert control over workforce decisions, even across multiple locations.
Much Lower Layoff Triggers
The proposal sharply lowers the thresholds that trigger advance notice:
- A site closing would require notice if five or more employees lose their jobs at a single location within 30 days.
- A mass layoff would be triggered by:
- 10 employees at one site losing employment within 90 days, or
- 250 employees nationwide, regardless of location.
- 10 employees at one site losing employment within 90 days, or
The percentage-based tests used under current law would be eliminated, making WARN applicable in many more situations.
Remote Workers Explicitly Counted
For the first time, the bill clearly addresses remote work. Remote employees would be tied to a specific site if they report to managers there, receive assignments from that location, or are impacted by a reduction tied to that site.
This change would make WARN analysis more complex for distributed and hybrid organizations.
Expanded Definition of Job Loss
The Fair Warning Act broadens what counts as an employment loss. Significant reductions in hours would qualify if hours are cut by more than 50% for three consecutive months, shortening the timeframe compared to current law.
Temporary layoffs would also be treated as job losses unless employers meet strict notice, recall, and short-time compensation requirements.
Longer Notice and More Disclosure
Advance notice would increase from 60 to 90 days. Employers would also be required to notify additional government entities, including the U.S. Department of Labor and state governors.
Notices would need to include clearer details about whether layoffs are permanent, expected recall dates, employee roles, benefit rights, and opportunities at other company locations.
Stronger Enforcement and Penalties
The bill strengthens enforcement by increasing potential damages to up to 120 days of back pay and benefits in some cases. WARN rights could not be waived through arbitration agreements or class action waivers, opening the door to more court litigation.
The Department of Labor would also be required to create a public WARN database, making layoff notices searchable by company, industry, and location.
State WARN Laws Still Apply
States with their own WARN-style laws would continue to enforce them if they offer greater protections. For multi-state employers, compliance would increasingly mean following the most demanding standard across federal and state rules.
What It Means for Employers
If passed, the Fair Warning Act would push WARN planning much earlier in restructuring decisions. Employers with remote workers, layered corporate structures, or phased layoffs would face higher compliance risk and more coordination challenges.
While the bill’s future remains uncertain, it signals a clear direction: broader layoff protections, longer notice periods, and greater public visibility into workforce reductions.
