New Expanded Minnesota WARN Act!
A significant expansion of the mini-WARN Act in Minnesota has been proposed and needs to be watched. If passed, HF1266 would additionally burden Minnesota employers who are downsizing by increasing their obligations to notify employees in advance of the loss of their jobs. In many regards HF1266 reiterates the federal WARN requirements, but there are a few important nuances which will make it harder on businesses, particularly smaller businesses in Minnesota, that experiencing a downturn.
First, under federal law an employment loss due to a single site mass layoff or plant closing is often triggered once 50 full-time employees are involuntarily fired (often aggregated over a 6-month period). The new mini-WARN would lower the number of affected employees to 25.
Second, the Minnesota law will be relevant to far more employers than the federal law. Under the federal law employers with 100 full-time employees are covered by the requirements to notify affected covered employees, local and state governments, unions, etc. 60-days in advance of the layoff or plant closing. If HF1266 is passed this number would drop for Minnesota employers from 100 to 25. Thereby making it necessary for many, many more employers in this state to closely monitor their layoff activity and to understand and comply with the procedural and notice requirements of this proposed law.
Third, the good news from the proposed mini-WARN Minnesota bill is that the notice period is shorter – 30 days instead of the 60 days required by the federal law!
Fourth, …but the penalties are potentially astronomical if employers in Minnesota fail to comply. At the federal level the law requires employers to pay eligible employees for their failure to provide sufficient notice of the termination of their employment; and if they do so timely there are no penalties, just the back wages owed to employees. As proposed, Minnesota employers who fail to provide notice to affected eligible employees would be required to pay each employer 3x the amount of compensation owed to each employee – i.e., if you fail to provide 30-days’ notice you could pay each affected eligible employee 3x their wages and benefits for that 30-day period. In addition, the state of Minnesota could levy a fine of up to $100/day for each employee to whom you failed to provide sufficient notice ($1,000/day if the government believes that you willfully violated the law) and could tax you for the costs of having to prosecute your company in court.
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