August 27, 2004Client Alert

New Illinois WARN Act Imposes Obligations on More Employers Than Federal WARN Act

On August 15, 2004, Illinois Governor Rod Blagojevich approved passage of the Illinois Worker Adjustment and Retraining Notification Act ("Illinois WARN"). Although similar to the federal WARN Act ("WARN"), which requires that certain employers give 60 days notice of plant closings and mass layoffs to employees, their representatives (if unionized), and various units of state and local government, Illinois WARN imposes obligations on employers of less persons than federal WARN. Where WARN defined an "employer" as a business enterprise that employs 100 or more employees, excluding part-time employees, or 100 or more employees who in the aggregate work at least 4,000 hours per week (exclusive of overtime), Illinois WARN lowers the threshold to 75 or more employees, excluding part-timers, or 75 or more who in the aggregate work at least 4,000 hours per week (exclusive of overtime). Illinois WARN also lowers the threshold for what constitutes a mass layoff. Instead of the WARN formula, which defines mass layoff as resulting in the layoff of at least 33% of the employees and at least 50 employees (excluding part-time employees) or at least 500 employees, Illinois WARN defines mass layoff as at least 33% of the employees and at least 25 employees (excluding part-timers) or at least 250 employees (excluding part-timers). In other respects Illinois WARN and WARN are similar or the same.

Illinois WARN becomes effective on January 1, 2005. At that time Illinois employers will have to reconcile the requirements of both acts. Until then, Illinois employers are only subject to WARN requirements.

Note: Wisconsin employers have been subject to Wisconsin WARN requirements for several years. Wisconsin WARN covers employers with 50 or more workers. It requires that employers give notice of a temporary or permanent business closing affecting 25 or more workers or a layoff affecting at least 500 workers or at least 25% of all employees or 25 workers, whichever is greater.

For more information about federal and state plant closing laws, please contact any member of the Michael Best & Friedrich Employment Relations Practice Group.

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