WARN Act counting for remote employees

The prevalence of remote working arrangements has led to an increase in new and nuanced legal questions for employers to consider. One of these questions is how employers should count their remote workers when seeking to comply with the Worker Adjustment and Retraining Notification Act (WARN).

WARN requires covered employers to provide employees with advanced notice 60-days before closing a plant or conducting a mass layoff. A business is subject to WARN when it employs 100 or more individuals, excluding part-time employees, or 100 or more individuals, including part-time employees, who collectively work more than 4,000 hours a week. 29 U.S.C. § 2102(a)(1).

Determining the number of workers being terminated at a single site of employment is a key inquiry for determining whether the notice requirement is triggered under WARN. An employer triggers the 60 days' notice requirement when: (1) a plant closes, causing employment loss for at least 50 employees during a 30-day period, of either a single site of employment or facilities within a single site or (2) a mass layoff, or reduction-in-force, that is not the result of a plant closing and causes the employment loss of at least 500 employees or 50 employees who comprise at least 33 percent of active employees at a single site of employment. 29 U.S.C. § 2101(a)(2)-(3).

With many workers now working remotely from their homes, how should employers count them for the single site of employment analysis?

While WARN and its corresponding regulations do not explicitly address "remote" employees. The regulations do provide guidance on workers who are "outstationed."

(6) For workers whose primary duties require travel from point to point, who are outstationed, or whose primary duties involve work outside any of the employer's regular employment sites (e.g., railroad workers, bus drivers, salespersons), the single site of employment to which they are assigned as their home base, from which their work is assigned, or to which they report will be the single site in which they are covered for WARN purposes.

10 C.F.R. § 39.3(i)(6).

While the regulations provided guidance on "outstationed" employees, until recently, it was not clear whether remote workers should be considered under this guidance or as separate employees working from their own personal site of employment. A recent case has added clarity on this issue.

In Re: Hoover v. Drivetrain LLC, the Court concluded that the text of the "outstationed" employees regulation undoubtedly covers remote employees." No. AP 20-50966, 2022 WL 3581103, at *4 (Bankr. D. Del. Aug. 19, 2022) (emphasis added).

Accordingly, a remote or telecommuting worker's "single site of employment" is determined by either (1) the single site of employment to which they are assigned as their home base, (2) from which their work is assigned or (3) to which they report. Id. (citing 20 C.F.R. §639.3(i)(6)). The US Department of Labor's guidance also confirms this interpretation. Thus, for example, an employee living in Miami who receives work from or reports to a supervisor in the Houston office of a business would be considered an employee in the Houston site of employment for WARN.

Remote working arrangements will continue to be a part of many workforces moving forward, and employers will want to stay updated on the evolving legal requirements in this area.