New WARN Act in Iowa

 
Monday, April 19, 2010
 
Iowa recently passed a new WARN Act which will cover all Iowa employers with 25 or more full time employees.  It is effective July 1, 2010.  The Federal WARN Act applies only to employers of 100 or more full time employees.  Consequently, many Iowa employers are either not covered by the Federal WARN Act or do not have layoffs in the numbers necessary to trigger obligations under the federal statute.

Iowa WARN Act notification obligations are triggered only by a “business closing” or a “mass layoff.”  Under the Iowa Act, a covered Iowa employer must provide a thirty-day written notice to affected employees and Iowa Workforce Development before implementing a business closing or mass layoff.  A business closing refers to the permanent or temporary shutdown of a single site of employment if the shutdown results in an employment loss for 25 or more employees, other than part-time employees.  A “mass layoff” refers to a reduction in force that is not the result of a business closing and which will result in an employment loss at a single site during any 30-day period for at least 25 or more employees other than part-time employees.  However, the Iowa WARN Act defines a “part-time employee” as one who is employed for an average of less than 20 hours per week.  It also includes a full time employee who has been employed for fewer than 6 of the 12 months preceding the date on which notice is required.

Exceptions

The Iowa WARN Act provides an extensive description of exemptions and complex rules involving layoffs in connection with the sale of a business, strikes or lockouts, rolling layoffs, faltering companies, unforeseeable business circumstances, and natural disasters.

Differences from Federal WARN Act

Under the Federal Act, if a notice is not given and a court later determines that it should have been, then the company may be liable for the wages and benefits denied during the required notice period plus attorney’s fees.  The Iowa WARN Act statute does not authorize such a private court action.  Failure to provide appropriate notice under the Iowa Act subjects an employer to a civil penalty of not more than $100 per day per affected employee per violation, and removes from courts jurisdiction to enjoin a business closing or mass layoff.

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