Navigating WARN Act Compliance for Remote Workers: What Employers Need to Know

Understanding the WARN Act and Remote Work

Most employers facing large-scale layoffs dread the WARN Act—a federal requirement that mandates employers with at least 100 full-time employees to provide 60 days’ advance notice for closures or mass layoffs affecting at least 50 employees at a single site. This challenge intensifies in the era of post-COVID remote work, as determining who to notify becomes more complex.

The Challenge with Remote Employees

The federal WARN Act does not explicitly address remote employees, unlike some state laws such as New York’s mini-WARN Act. This leaves employers confused about how to classify remote workers when considering WARN notifications. Generally, a worker’s site of employment is their physical workplace. However, for remote employees, it’s less straightforward.

Mobile Employees vs. Remote Workers

WARN regulations typically apply to employees who travel or do not have a fixed workplace. For these mobile employees, the site of employment might be:

1. Their home base
2. The place from which their work is assigned
3. The location to which they report

For truly remote workers, who work from home, the situation is murkier. Current case law has not definitively resolved how WARN applies to remote employees, leading many employers to err on the side of caution and include them in WARN notifications.

Recent Case: Zulily LLC

In a notable case, Zulily LLC laid off all employees on December 7, 2023, during its liquidation process. While approximately 850 employees were affected, WARN notices were issued only to in-office employees, leading to litigation from remote workers in both Ohio and Washington.

The plaintiffs argue they should have received WARN notice as they were assigned to Zulily’s offices as their home base, receiving evaluations and communications from those locations. Zulily countered, stating the mobile worker exception does not apply to fully remote employees, asserting their site of employment is their home, not corporate offices.

As of now, the courts have yet to rule on these motions, and clarity on this issue is eagerly awaited by employers navigating WARN compliance.

Continuous Monitoring

As developments unfold, it’s crucial for employers to stay informed about changes in regulations and court rulings regarding the WARN Act and remote work. SPB’s employment law team will keep you updated with any future insights.