Dislocated Workers

About 7,000 plant closures and mass layoffs occurred in 1990 and 1991, leaving more than one million Americans out of work. Although a 1988 law requires certain employers to give their workers and state and local agencies 60 days' notice of impending plant closings or layoffs, about half of all employers in a GAO survey did not give any notice at all and many of those who had provided notice gave less than the required time. The notification provisions of the Worker Adjustment and Retraining Notification Act (WARN) were intended to give workers time to adjust and allow states to begin helping workers find new jobs as quickly as possible. As the law is written, however, many major layoffs are not covered and, given the high percentage of closures for which there was no notice or notices were late, the use of the courts as an enforcement mechanism does not appear to be working. GAO suggests that as Congress considers ways to improve the implementation of WARN, the Department of Labor be given responsibility for enforcing the law. GAO summarized this report in testimony before Congress; see: Dislocated Workers: Implementation of the Worker Adjustment and Retraining Notification Act, by Linda G. Morra, Director of Education and Employment Issues, before the Subcommittee on Labor, Senate Committee on Labor and Human Resources. GAO/T-HRD-93-6, Feb. 23, 1993 (nine pages).

GAO found that: (1) employers were more likely to give their employees the required 60-day notice of plant closures or layoffs after enactment of WARN; (2) 64 percent of the major layoffs were exempt from WARN notice requirements because they did not affect at least one-third of the workforce; (3) many employers failed to adequately provide workers with advance closure or layoff notices or filed WARN notices late; and (4) some employers did not include the necessary notice information required by the Department of Labor (DOL); (5) although there was evidence of WARN violations, workers have filed few lawsuits because of the added cost, limited incentives, and uncertain outcomes; (6) although DOL and state dislocation agencies have attempted to clarify any confusion regarding WARN implementation regulations, many employers remain confused or unaware about the application of WARN provisions; and (7) WARN advance notices have enabled workers to find new jobs sooner and plan for impending layoffs, and did not significantly increase employers' costs or decrease worker productivity.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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