With many major companies like Amazon, Google, Microsoft and more announcing layoffs and concerns of a possible recession on the horizon, many might be curious about the requirements in place in Illinois.
It's important to note there is a difference in the state and federal requirements.
According to the Illinois Department of Commerce and Economic Opportunity, " under state law, employers must notify the state when they plan to lay off workers."
That law is known as the Illinois Worker Adjustment and Retraining Notification Act, also called the WARN Act.
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It is specifically in place for plant closures or mass layoffs.
The law was most recently in headlines after state labor officials announced an investigation into an Illinois-based pharmaceutical company that abruptly closed all of its operations, including its out-of-state locations in New Jersey, New York and Switzerland, and to lay off hundreds of workers with almost no warning.
Akorn Operating Co., which is based in the northeastern Illinois city of Gurnee, told its 400 workers last month that it planned to file for bankruptcy and that they would be laid off within 24 hours, the Chicago Tribune reported.
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CEO Douglas Boothe told employees in a video that the company's leaders decided on the move after failing to find a buyer for the company.
“I realize this is a tremendous shock and it will take time to absorb the news and what it means to you, your colleagues and your families,” Boothe said in the video, which was first obtained by the Decatur Herald & Review.
A spokesperson for the Illinois Department of Labor said the agency is investigating the situation because Akorn didn’t file the required 60-day notice of mass layoffs or plant closures.
Boothe said in his video that the company notified the U.S. Food and Drug Administration of the closure.
Here's what to know about the WARN Act:
Who must follow the WARN Act and when?
Under Illinois law, the WARN Act applies to employers with 75 or more full-time employees. It requires such employers to give workers 60 days advance notice for a plant closure or mass layoff, which is defined as:
- 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.
A plant closure is defined as the "closure of a site that employs 50 or more employees."
"A WARN notice is required when a business with 100 or more full-time workers (not counting workers who have less than six months on the job and workers who work fewer than 20 hours per week) is laying off at least 50 people at
a single site of employment, or employs 100 or more workers who work at least a combined 4,000 hours per week, and is a private for-profit business, private non-profit organization, or quasi-public entity separately organized from regular government," according to Department of Commerce and Economic Opportunity.
When was the WARN Act passed?
The law was first passed in 1988 in an effort to "provide workers with sufficient time to prepare for the transition between the jobs they currently hold and new jobs."
