Texas WARN Act: Coverage, Notice Requirements, and Penalties

The Texas WARN Act is really the federal Worker Adjustment and Retraining Notification Act, because Texas has not enacted its own version. Under the federal law, employers with 100 or more employees must give at least 60 days’ written notice before a qualifying plant closing or mass layoff, and that notice has to reach affected workers, the Texas Workforce Commission, and the local government where the site sits.¹ About a dozen states have layered on stricter “mini-WARN” laws. Texas has not, so the federal rules are the whole picture here.

Which Employers Are Covered

WARN applies to any business that employs either 100 or more full-time workers, or 100 or more employees (including part-time) who together work at least 4,000 hours per week, excluding overtime.² “Part-time” means an employee averaging fewer than 20 hours per week, or one who has worked fewer than six of the preceding 12 months. Part-timers do not count toward the 100-employee threshold, but they still receive notice when a covered event happens.³

Both for-profit and nonprofit organizations are covered if they meet the size test. Some public entities that operate like private businesses can be too. The count is done at the specific site of employment where the closing or layoff will happen, not across the whole company.

Which Layoffs and Closings Trigger the 60-Day Notice

Two kinds of events trigger WARN, each with its own numbers.

A plant closing is a permanent or temporary shutdown of a facility, or an operating unit within a facility, that causes an employment loss for 50 or more full-time employees within a 30-day period.²

A mass layoff is a reduction in force that isn’t a plant closing but still hits either of these thresholds in a 30-day period at a single site:

500 or more full-time employees lose their jobs, regardless of what share of the workforce that is; or
At least 50 full-time employees lose their jobs and they make up at least 33 percent of the full-time workforce at that site.

Part-timers are excluded from both sides of these calculations.²

“Employment loss” covers three situations: a termination other than for cause, voluntary departure, or retirement; a layoff lasting more than six months; and a cut in hours of more than 50 percent in each month of any six-month period. A layoff first pitched as short-term can become a covered event if it stretches past six months and the extension wasn’t reasonably foreseeable when the layoff began. Notice is then due as soon as the extension becomes apparent.⁴

Rolling Layoffs Get Added Together

Employers cannot dodge WARN by breaking a large layoff into smaller waves. Separate employment losses at a single site within any 90-day window are aggregated, and if the total crosses the plant-closing or mass-layoff threshold, notice was due before each round. The only way out is proof that each round had a separate and distinct cause.⁵

Who Gets Notice and What It Has to Say

Written notice must reach three parties: each affected employee (or the union representing them), the state entity that handles rapid response, and the chief elected official of the local government where the closing or layoff will occur.¹ If a site sits in more than one local jurisdiction, the notice goes to the government to which the employer pays the highest taxes.

Notices to unions or directly to non-union workers must include:

The name and address of the affected location and a company contact with a phone number.
Whether the action is expected to be permanent or temporary, and the anticipated date of the first separation.
The job titles being eliminated and the number of workers in each.
For non-union workers, a statement about bumping rights; for unionized workplaces, the names of affected employees along with their titles.

The versions sent to the state and local government contain the same information plus employee counts by job classification.⁶

Filing With the Texas Workforce Commission

In Texas, the state notice goes to the Texas Workforce Commission, which accepts WARN letters by mail, email, or fax:⁷

Mail: Texas Workforce Commission, Attn: Layoff/WARN, 101 E 15th St, Rm 440T, Austin, TX 78778-0001
Email: warnletter.central@twc.texas.gov
Fax: 512-936-0331

Once the notice is on file, TWC’s rapid response team coordinates on-site services for displaced workers: help with unemployment claims, registration on WorkInTexas.com, retraining programs, and referrals to local Workforce Solutions offices.⁸ If you’re one of the affected workers, those services are free.

When Shorter Notice Is Allowed

Three exceptions let an employer give fewer than 60 days’ notice, but none of them wipe out the notice obligation. The employer still has to give as much notice as circumstances allow and include a written explanation of why the full period wasn’t possible.¹

Faltering company. Applies to plant closings only. The employer must have been actively seeking capital or new business that would have kept the facility open and reasonably believed that giving notice would have scared off the financing or deal.
Unforeseeable business circumstances. Sudden, dramatic changes that couldn’t have been predicted when notice would otherwise have been due, such as an unexpected major contract cancellation or a market collapse.
Natural disaster. Floods, earthquakes, hurricanes, and similar events allow immediate action.

Pay in Lieu of Notice

Some employers skip the 60-day notice and simply pay wages and benefits for that period. WARN does not authorize that substitute. The law requires written advance notice, and the employer is technically in violation.⁹ In practice, the payments often offset the damages a court would award, because the maximum penalty is 60 days of back pay and benefits anyway. But the payments have to be voluntary and unconditional. If they were already owed under a contract, company policy, or another law, they can’t be offset against WARN damages.¹⁰

Sales, Relocations, and Transfer Offers

When a business is sold, the seller is responsible for any covered event through the date of sale, and the buyer is responsible for events after closing.¹¹ The technical termination that happens at closing isn’t itself an employment loss under WARN, but a buyer that restructures a week later may owe its own 60 days’ notice.

An employer relocating or consolidating operations can sometimes avoid a covered event by offering affected workers a transfer:¹²

If the new site is within reasonable commuting distance, there is no employment loss whether the worker takes the transfer or not.
If the new site is farther away, the worker avoids an employment loss only by accepting within 30 days of the offer or 30 days of the closing or layoff, whichever is later.

The offer has to come before the closing or layoff, there can be no more than a six-month break in employment, and the new position can’t amount to a constructive discharge. These transfer rules only apply when the layoff is caused by a relocation or consolidation.

Penalties for Violations

An employer that violates WARN owes each affected worker back pay at the higher of the employee’s average regular rate over the prior three years or their final regular rate, plus the cost of employee benefits, including medical expenses, that would have been covered had employment continued. Liability accrues for each day of the violation, capped at 60 days and never more than half the total days the employee worked for that employer.¹⁰

An employer that fails to notify the local government also faces a civil penalty of up to $500 per day of the violation. That penalty disappears if the employer pays each affected employee in full within three weeks of ordering the shutdown or layoff.¹⁰ Courts can reduce damages if the employer shows it acted in good faith and had reasonable grounds to believe it was complying.

How Workers Enforce Their Rights

The U.S. Department of Labor does not sue employers under WARN. Its role is limited to guidance.¹³ Enforcement runs through private lawsuits filed in federal district court, either by individual workers or as a class action, in any district where the violation happened or where the employer does business.

Courts may award reasonable attorney’s fees to the prevailing party, which lowers the cost of bringing a claim.⁹ WARN itself has no built-in statute of limitations, so federal courts borrow the most analogous state limitation period, and the deadline varies. If you think you were denied proper notice, talk to an attorney soon rather than assuming you have years to file.

1
Office of the Law Revision Counsel. 29 USC 2102 – Notice Required Before Plant Closings and Mass Layoffs
2
Office of the Law Revision Counsel. 29 USC 2101 – Definitions; Exclusions From Definition of Loss of Employment
3
U.S. Department of Labor. Employers Guide to Advance Notice of Closings and Layoffs
4
Government Publishing Office. 20 CFR 639.5
5
U.S. Department of Labor. WARN Advisor
6
eCFR. 20 CFR 639.7 – What Must the Notice Contain
7
Texas Workforce Commission. Worker Adjustment and Retraining Notification Notices (WARN)
8
Texas Workforce Commission. Rapid Response Guide
9
U.S. Department of Labor. WARN Advisor
10
Office of the Law Revision Counsel. 29 USC 2104 – Liability of Employer
11
U.S. Department of Labor. WARN Advisor
12
U.S. Department of Labor. WARN Advisor
13
U.S. Department of Labor. Worker Adjustment and Retraining Notification Act Frequently Asked Questions