The federal Worker Adjustment and Retraining Notification Act (WARN Act) requires certain employers to give their employees advanced written notice of mass layoffs and plant closings. Even though the federal WARN Act does not apply to employers with fewer than 100 full-time employees, an Ohio bill introduced earlier this month would, if enacted, apply to smaller business enterprises in Ohio. House Bill 434 (H.B. 434) would expand advance layoff notification requirements to include Ohio employers that have 50 or more full-time and/or part-time employees.
H.B. 434 is similar in purpose to the WARN Act. The proposed Ohio law, however, is more burdensome than the WARN Act in many ways that should interest even those employers that are already subject to the WARN Act.
Current Ohio Law
Current Ohio law does not require advance notice to employees when an employer plans a worksite closing, mass layoff, or transfer of operations. However, R.C. 4141.28(C) requires an employer that lays off 50 or more individuals within any seven day period to notify the Ohio Department of Job and Family Services (ODJFS) at least three days prior to the layoff. The law also requires, at the time of the layoff, that the employer provide information necessary to determine the individual’s eligibility for unemployment compensation to both the individual and ODJFS. H.B. 434 would eliminate these requirements from state law and replace them with a more burdensome advance written notice system.
H.B. 434 and the WARN Act Compared
H.B. 434 and the WARN Act contain these noteworthy differences:
- Advance Notice to Employees. H.B. 434 requires covered employers to provide notice 90 days in advance of a covered worksite closing, mass layoff, or transfer of operations (or 120 days when 250 or more employees are affected). The WARN Act requires 60 days notice in advance of a covered plant closing or mass layoff.
- Scope of Notice. H.B. 434 has broader notice provisions, requiring that employers notify more entities and provide more information than required in the WARN Act.
- When Notice is Required. In addition to mass layoffs and plant/worksite closings, H.B. 434 applies to a “transfer of operations.” This phrase is not defined in the bill and it is not included in the WARN Act. Thus, the inclusion of “transfer of operations” in H.B. 434 suggests a possibly broader application than WARN Act’s applicability to mass layoffs and plant closings only.
- Number of Employees Affected. H.B. 434 defines mass layoffs, worksite closings, and transfers of operations to include an employment loss of 25 or more employees. The WARN Act defines mass layoffs and plant closings to include an employment loss of 50 employees or more and the number of terminated employees constitute at least 33 percent of all employees. The WARN Act also includes situations with an employment loss of 500 employees or more, regardless of the percentage of employees involved.
- Enforcement. H.B. 434 has greater enforcement mechanisms than the WARN Act. For example, employers would be subject to ODJFS investigations for failing to comply with H.B. 434’s notice requirements. Such investigations may create distractions for employers and may result in significant expenditures to hire legal counsel for representation in the investigation.
- Liability for Damages. H.B. 434 provides for greater damages for affected employees than under the WARN Act, including double damages. Further, under the WARN Act, damages are capped at 60 days, but under H.B. 434, damages could extend to 90 days or 120 days depending on the number of affected employees.
As these examples demonstrate, H.B. 434 presents a significantly greater burden on employers than the WARN Act. Even if some of these provisions are amended to become less burdensome, H.B. 434 would still be a new burden for smaller Ohio employers that are not currently subject to the WARN Act and would likely add additional burdens for Ohio employers who are subject to the WARN Act.