WARN Act Illinois: Requirements, Coverage, and Compliance
October 17, 2023 by Rebecca Ahn
If you are planning to lay off employees in the state of Illinois, you will need to make sure that you comply with all regulations pertaining to the Worker Adjustment and Retraining Notification Act (commonly known as the WARN Act). This will ensure that your employees are treated fairly and that you are not penalized for your layoff or reduction in force (RIF) event.
To make sure that you are compliant with the Illinois WARN Act, you will need to understand three different areas of these laws:
- The federal WARN Act requirements
- The state-specific WARN Act Illinois requirements
- How to comply with the Illinois WARN Act
Before we get into our analysis for each of these areas, make sure to download our simple WARN Act checklist with the link below:
Federal WARN Act Requirements
The WARN Act has several regulations that shape who the law should be applied to. This includes the following stipulations:
- The WARN Act applies to organizations that have over 100 full-time employees.
- The WARN Act applies to publicly and privately held companies.
- The WARN Act applies to organizations that are for-profit or not-for-profit.
- A WARN notice must be given if there is a plant closing or a mass layoff.
The first three stipulations are fairly simple to understand. If you are an organization that has less than 100 full-time employees (FTEs), you do not have to comply with the WARN Act. If you have over 100 full time employees, the WARN Act will apply to you regardless of whether your organization is public or private, and for-profit or not-for-profit.
The final stipulation can be a bit trickier, since it relies on understanding the federal definitions of a “plant closing” and “mass layoff.” So now let’s dive into how and when these WARN requirements and definitions differ at the state level for the Illinois WARN Act.
What Is the WARN Act in Illinois?
All US states must abide by the federal WARN Act regulations outlined above. In addition to that, some states do have more stringent regulations specific to companies and employees located in their state.
Illinois is among those with specific state WARN laws about layoffs that your organization will have to follow. This means that if you are laying off employees in Illinois, you will also need knowledge of these state regulations.
Fortunately, Illinois WARN Act laws don’t vary too much from the federal WARN Act. The main differences are in which employers and reduction events are covered by the WARN Act and the punitive consequences for not following WARN regulations.
WARN Act Illinois Requirements
Illinois state laws have a more conservative view of which employers must comply with the WARN Act.
According to the Illinois Dept. of Commerce and Economic Opportunity (DCEO):
“Illinois WARN applies to employers with 75 or more full-time employees (excluding part-time workers) and requires employers to provide 60 days advance notice of pending plant closures or mass layoffs.”
This differs from the federal WARN Act which requires notice if a company has 100 or more employees. However, this is a fairly small difference which shouldn’t change how your organization complies with the WARN Act, unless you fall in that small window of companies with 75-99 employees.
WARN Act Illinois Definitions
The state of Illinois also has a slightly different definition for qualifying layoff events from that of the federal WARN Act.
According to the Illinois WorkNet website, a “plant closure” that triggers WARN notice requirements is defined as a “Closure of a site that employs 50 or more employees.”
This is actually essentially the same as the federal definition, which applies to “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 at the single site of employment during any 30-day period for 50 or more employees excluding any part-time employees.”
However, the Illinois definition of a qualifying “mass layoff” does differ from the federal level. This state level definition of a “mass layoff” applies to the following:
- “25 or more full-time employees are laid off, and they constitute one-third or more of the full-time employees at the site, or
- 250 or more full-time employees are laid off at a single site.”
In comparison, the federal WARN Act defines a mass layoff as:
- “a reduction in force which results in an employment loss at the single site of employment during any 30-day period for (i) at least 33 percent of the employees (excluding any part-time employees), and at least 50 employees (excluding any part-time employees); or (ii) at least 500 employees (excluding any part-time employees).”
Essentially, this means the WARN Act in Illinois applies to workforce reduction events affecting half as many employees as required at the federal level, specifically in two scenarios:
- 25 or more impacted employees that constitute at least one-third of total worksite employees in Illinois vs. 50 or more impacted employees constituting at least one-third of the site’s total workforce at the federal level.
- 250 or more impacted employees at a single site in Illinois vs. 500 or more impacted employees at a single site at the federal level.
WARN Act Illinois Examples
To help spell this out a bit further, let’s look at a couple of examples of when the WARN Act might apply in the state of Illinois.
- A non-profit organization with 45 employees will be closing down an office in St. Louis, Illinois resulting in 40 employees being permanently laid off.
Since the company has less than 75 employees, it does not have to comply with the WARN Act regulations.
- A manufacturing company in Chicago, Illinois has 90 employees. The organization is laying off 30 employees who make up over half of its workforce at one office location due to the loss of a business contract.
This company is required to give WARN notice in this case, since it has more than 75 employees and is laying off more than 25 employees who constitute over one-third of its total worksite employees, according to the Illinois WARN Act requirements and definitions.
WARN Act Illinois Consequences
Illinois state regulations also lay out additional punitive consequences for not following the WARN Act in Illinois.
The federal government already penalizes businesses that do not comply with the WARN Act by forcing them to provide back pay and benefits to employees for as long as the business is in violation.
According to the Illinois Department of Labor (DOL), the state WARN law echoes this penalty:
“An employer that fails to provide notice as required by law is liable to each affected employee for back pay and benefits for the period of the violation, up to a maximum of 60 days.”
Illinois then takes this penalty a step further, adding that:
“The employer may also be subject to a civil penalty of up to $500 for each day of the notice violation.”
Now let’s dig into how Illinoisan companies should comply with providing WARN Act notice if their reduction event qualifies according to these Illinois WARN requirements, so as to avoid any penalties.
How Long is the Illinois WARN Act Notice?
To comply with the WARN Act in Illinois, you will need to send a WARN notice letter to your affected employees 60 days in advance of their last day with the organization. This is the same as stipulated at the federal level.
This can be done through several different delivery methods, as long as the notice is given in writing. The US Department of Labor (DOL) states that any reasonable method of delivery is applicable. However, the US DOL also clarifies that:
“Use of preprinted notices that are regularly included in employees’ paychecks or pay envelopes are not acceptable and do not meet the WARN Act requirements.”
This means that if your organization regularly gives out notices about the workplace to your employees with their paychecks, then providing a WARN notice this way will not be sufficient. This is because your employees might not distinguish this WARN notice from the other notices they regularly receive through this delivery method.
Your organization must also provide a notice to your government about your reduction event. Similar to the notice given to your employees, this notice must also be delivered at least 60 days in advance.
According to the US Department of Labor, “Advance notice should be given to the State Rapid Response Dislocated Worker Unit as well as to the chief elected official of the local government where the closing or mass layoff is to occur.”
For information on who and how to notify of your layoff event in Illinois, visit the Illinois WorkNet website.
Other State Laws Impacting Your Layoffs
If you will be laying off employees across state lines, you will also need to be aware of which other applicable states have different WARN Act regulations that your organization must follow.
In these cases, the smartest strategy is to identify the state laws with the most stringent WARN regulations where you have impacted employees, and then follow those regulations for your employees across all of your locations.
Most states don’t have their own specific regulations and are only required to follow the federal WARN Act. However, the following states besides Illinois do have specific state-level laws that your organization will need to review if you are also laying off employees in these locations:
You can read more about these individual state WARN laws by visiting the Employment Law Handbook website.
You should also always consult with your legal counsel when preparing to conduct a layoff event or researching laws regarding layoffs in your locations to see what local, state, and federal laws may apply to your specific situation.
WARN Act Illinois: Final Takeaways
While the Illinois WARN Act may be simple enough to understand, it’s still important to stay informed on the most current regulations when your organization needs to comply.
This guide covered many of these specifics, but the law is constantly evolving year after year. So be sure to refer to the US Department of Labor as well as the Illinois DOL and DCEO websites for the most comprehensive and up-to-date explanation of the law.
It can also be extremely helpful to offer outplacement services to employees who are affected by a plant closing or mass layoff event in areas of Illinois such as Chicago. These services can help support their transition and provide a solution for any issues that may arise.
Remember to consult with your legal team and company stakeholders about what solutions might be right for your organization to help you navigate the complexities of your reduction event and ensure you are following all applicable local, state, and federal laws.
In need of outplacement assistance?
At Careerminds, we care about people first. That’s why we offer personalized talent management solutions for every level at lower costs, globally.