The Worker Adjustment and Retraining Notification (WARN) Act is a federal labor law requiring businesses to provide advance notice before implementing mass layoffs or plant closures. Under the WARN Act Colorado requirements, employers with 100 or more full-time employees must give at least 60 days’ notice before initiating a mass layoff or closing a facility, ensuring employees have time to prepare for job loss.
WARN Act & COVID-19: How the Pandemic Affected Compliance
The COVID-19 pandemic caused economic disruptions that led to sudden layoffs, furloughs, and business closures, making WARN Act compliance particularly challenging. While the law generally protects employees, certain exceptions apply during emergencies, such as unforeseeable business circumstances and government-mandated closures.
Understanding WARN Act Colorado exceptions is crucial for employers navigating layoffs while staying compliant with federal and Colorado employment laws.
What Is the WARN Act?
The WARN Act requires covered employers to provide a 60-day notice before:
- A plant closing that results in 50 or more job losses at a single site.
- A mass layoff affecting at least 33% of the workforce or 500 or more employees.
This regulation, outlined in 29 U.S.C. § 2101(a)(1), applies to qualifying employers in Colorado.
WARN Act Colorado Notice Requirements
Colorado businesses with 100 or more full-time employees must:
- Provide written notice to affected employees.
- Notify the Colorado Department of Labor & Employment (CDLE).
- Inform local government officials about pending layoffs.
Failure to follow these Colorado WARN notices can lead to penalties, back pay claims, and civil liabilities.
Which Colorado Employers Are Covered by the WARN Act?
A business falls under the WARN Act Colorado requirements if it:
- Employs 100 or more full-time workers (excluding part-time employees working under 20 hours per week).
- Has a workforce that collectively logs at least 4,000 hours per week (excluding overtime).
- Meets layoff thresholds set by federal law.
Employer status is determined based on the date WARN notices should have been issued. See 29 U.S.C. § 2101(a)(1).
Counting Employees Under the WARN Act
- Only full-time employees count toward WARN thresholds.
- Part-time employees and recent hires (less than six months of employment) are not included.
- Employment status changes (such as full-time to part-time shifts) may impact WARN applicability.
When Does the WARN Act Apply?
The WARN Act applies to plant closings and mass layoffs, but certain exceptions exist. The WARN Act notice requirements do not apply in the following situations:
- Government-Mandated Layoffs – If a government entity orders the layoff or business closure, the employer may be exempt from WARN Act obligations.
- Closure of Temporary Facilities – If employees were hired for a specific temporary project, and the project is completed as planned, WARN requirements do not apply.
What Qualifies as a Plant Closing Under the WARN Act?
A plant closing is defined as:
“The permanent or temporary shutdown of a single site of employment, or one or more facilities or operating units within a single site of employment, if the shutdown results in an employment loss during any 30-day period for 50 or more employees excluding any part-time employees.” (29 U.S.C. § 2101(a)(2))
This means that if a business shuts down operations at a location and 50 or more full-time employees lose their jobs within a 30-day period, WARN notice requirements apply.
What Qualifies as a Mass Layoff Under the WARN Act?
A mass layoff is defined as:
“A reduction in force which . . . results in an employment loss at the single site of employment during any 30-day period for
(i)(I) at least 33 percent of the employees (excluding any part-time employees); and
(II) at least 50 employees (excluding any part-time employees); or
(ii) at least 500 employees (excluding any part-time employees).” (29 U.S.C. § 2101(3))
WARN Act Notice and the “Single Site of Employment” Rule
WARN Act notice requirements are only triggered if the plant closing or mass layoff occurs at a “single site of employment.” The Department of Labor regulations define a single site of employment based on geographic proximity and operational integration:
“Separate offices can be a single site if they are in ‘reasonable proximity’ and share the same staff and equipment.” (20 C.F.R. § 639.3(i)(3))
This means that multiple facilities within close geographic distance may be considered a single employment site if they have overlapping employees, resources, or management.
The 90-Day Aggregation Rule: How Layoffs Are Counted
When determining WARN Act applicability, employers must be aware of the 90-Day Aggregation Rule, which prevents businesses from circumventing notice requirements by conducting staggered layoffs.
Under 29 U.S.C. § 2102(d), if two or more rounds of layoffs occur at a single site of employment within 90 days, and the cumulative job losses exceed the WARN thresholds for plant closings or mass layoffs, the WARN notice requirement applies unless the employer can prove that:
- The layoffs were separate, distinct actions, and
- The layoffs were not intended to evade WARN Act obligations.
If an employer fails to provide notice under these circumstances, affected employees may pursue legal claims for back pay and benefits.
Which Employees will be Counted When Determining When a Plant Closing or Mass Layoff has occurred?
Only the laid-off “full time” employees will be counted when determining whether a “plant closing” or “mass layoff” has occurred so as to trigger an employer’s obligation to provide advance notice under the WARN Act. Employees who work less than 20 hours per week or who had not worked during six of the 12 months preceding the plant closing date are not “full time employees” under the Act, but are classified as “part-time employees “or” new employees,” and are not counted for purposes of determining whether a “plant closing” or “mass layoff” occurred.
Penalties for WARN Act Non-Compliance
Failure to comply with the WARN Act notice requirements can result in serious financial penalties for employers, including:
- Back pay and benefits owed to affected employees for each day of notice not provided.
- Civil penalties of up to $500 per day for failing to notify the Colorado Department of Labor & Employment (CDLE) or local government officials.
- Legal action from employees, which may result in damages exceeding statutory fines.
Employers can avoid civil penalties if they provide full compensation to affected employees within three weeks of termination. (29 U.S.C. § 2104)
WARN Act Colorado Exceptions: When Employers May Bypass Notice Requirements
Though the WARN Act generally requires 60 days’ notice, three statutory exceptions allow employers to bypass the requirement under specific circumstances:
1. Faltering Business Exception (29 U.S.C. § 2102(b)(1))
This exception applies when:
- An employer is actively seeking financing or contracts to prevent closure.
- The employer reasonably believes that issuing WARN notice would jeopardize funding efforts.
- The employer can demonstrate a “realistic opportunity” to secure needed financial resources.
Strict documentation is required to qualify for this exception.
2. Unforeseeable Business Circumstances Exception (20 C.F.R. § 639.9(b)(2))
Employers may claim this exemption if:
- Layoffs are caused by unforeseen events beyond the employer’s control, such as:
- Government-mandated shutdowns (e.g., pandemic-related restrictions).
- Supply chain disruptions or sudden contract cancellations.
- Economic downturns that could not have been anticipated.
- Employers must prove that the triggering event was sudden, unexpected, and outside their control.
3. Natural Disaster Exception (29 U.S.C. § 2102(b)(2)(B); 20 C.F.R. § 639.9(c))
Employers are not required to provide WARN notice if layoffs result directly from a natural disaster, including:
- Earthquakes, hurricanes, floods, wildfires
- Pandemics or other large-scale public health emergencies
Employers must demonstrate a direct causal link between the disaster and the layoffs.
How Colorado Employers Can Stay Compliant with the WARN Act
Employers can reduce legal risks and ensure compliance with WARN Act requirements by:
- Evaluating whether a layoff or closure meets WARN Act thresholds under Colorado WARN notice requirements.
- Issuing WARN notices at least 60 days in advance to employees, the Colorado Department of Labor, and local officials.
- Keeping detailed records to demonstrate good faith efforts in cases where exceptions may apply.
- Consulting an experienced employment attorney to navigate WARN Act exceptions and compliance strategies.
Protect Your Business and Employees: Consult a Colorado Employment Attorney
The WARN Act imposes strict notice obligations on employers, and non-compliance can lead to costly lawsuits and penalties. Ensuring that your business follows state and federal employment laws is essential to avoiding legal challenges.
Need Legal Guidance? Contact Baird Quinn LLC Today
Our experienced Colorado employment law attorneys can help:
- Assess whether WARN Act notice requirements apply to your business.
- Advise on exceptions and legal defenses for layoffs and plant closures.
- Ensure compliance with the WARN Act and Colorado labor laws.
Contact us today for a consultation and ensure your business is protected while navigating workforce reductions and legal compliance.