Plant closings and mass layoffs have become an everyday event in the United States. Nearly 2 million people lose their jobs every year in these events.
Losing a job is a hardship under the best of circumstances. But with an opportunity to plan, employees and their communities can make adjustments. Employees can reduce expenses, avoid major purchases such as a new car, or get additional training. They can look for another source of medical insurance for their families. Most important, they can look for a new job before they lose their paycheck.
Most employers, however, deny employees and communities the opportunity to plan. Instead, they close the plant or lay employees off without notice. Many employees receive literally no notice; when they leave work on Friday, they are told not to come back on Monday. Keeping employees in the dark turns a manageable hardship into a catastrophe.
In 1988, Congress passed the WARN Act, requiring employers to give employees and the community 60 days notice of a plant closing or mass layoff. The majority of employers, however, do not obey the law. The federal General Accounting Office found that only 36% of employers provide the legally required notice when conducting a plant closing or layoff.
Legislation is pending in Congress (the FOREWARN Act) that would strengthen the WARN Act, including increasing the penalties for non-compliance to a level that will cause employers to obey the law.
