Merkley Cosponsors Legislation to Protect Workers Facing Mass Layoffs and Plant Closings

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The Federal Oversight, Reform, and Enforcement of the WARN (FOREWARN) Act would strengthen enforcement of current law and close loopholes in the current Worker Adjustment and Retraining Notification (WARN) Act, which became law in 1988.

“Too often over the last few decades workers have been sent home with barely a moment’s notice when their factory abruptly closed down,” Merkley said. “We need to give both workers and communities advanced warning when they are at risk of mass layoffs. This bill will ensure that they have time to prepare and also that back pay gets to the worker in a timely manner. In Oregon, we know this problem all too well. The workers at the Blue Heron paper mill, laid off almost one and a half years ago, still have not seen a dime of their back pay. That is just wrong.”

“It has been over a year and the workers at the Blue Heron paper mill still have not received their wages and back pay as required by law,” said Greg Pallesen, Vice President of the Association of Western Pulp and Paper Works.  “Workers need enough advance notice in order to figure out how they will put food on the table and how to best support their family through this very difficult time.  Advance warning is the least companies can do for their workers.”

The Blue Heron paper closed in February of last year. The laid off workers have had to hire an attorney to fight for the back pay they are owed by law because Congress never provided the Department of Labor with enforcement responsibility.

Congress passed the WARN Act in 1988 to give workers and communities 60 days advance notice to adjust to an impending “plant closing” or “mass layoff.”  Compelling evidence demonstrated that retraining and other readjustment efforts have the greatest success when advance notice is provided.

The WARN Act’s effectiveness has been undermined by loopholes and weak enforcement. According to a 2003 GAO report that studied layoffs in 2001, only about 24 percent of mass layoffs and plant closures were covered by the statute. One reason the percentage is so low is that the WARN Act protections are only triggered when a “mass layoff” occurs if at least 33 percent of the employer’s workforce, up to 499 workers, is laid-off. This means that a large employer can terminate 499 workers without providing any notice. The report also found that employers failed to provide notice to employees in almost two-thirds of the layoffs and closures where the WARN Act otherwise would apply because of exceptions that employers can invoke. The WARN Act currently requires violating employers to pay an employee a day’s pay for every day of notice not provided but does not provide any agency with responsibility for enforcing workers’ rights.

The new FOREWARN Act would give the U.S. Department of Labor (DOL) the authority to investigate complaints and enforce the WARN Act when employers fail to comply with the law. The bill would also increase penalties from up to 60 days’ worth of back pay to up to 90 days’ worth of double-back pay.  In addition, it would require mass layoffs of 25 or more employees to be covered by the statute and cover employers with 75 or more full-time workers. The bill would also lengthen the notification period from 60 to 90 days and require employers to provide written notification to the Department of Labor that includes the reason for the plant closing or mass layoff, whether the employer has jobs elsewhere, and a statement of each employee’s right to wages and benefits. The bill would also expand recipients of notification to the Secretary of Labor, elected officials including the governor, member(s) of Congress, and state representatives, and the appropriate labor union(s) when applicable.

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