Recently Enacted Delaware Layoff Notification Law Imposes New Requirements on Delaware Employers

By Scott A. Holt

This article was updated on August 17, 2018

Effective January 7, 2019, Delaware private employers will need to comply with a new state law requiring 60 days advanced notice to affected employees and government officials of a mass layoff, plant closing or relocation. The new law, known as the Delaware Worker Adjustment and Retraining Notification Act (“Delaware WARN”), mirrors in many respects the federal Worker Adjustment and Retraining Notification Act (WARN). The Delaware WARN, however, differs from the federal WARN Act in four critical ways.  

The first critical difference is that the Delaware WARN has a lower “total employee” threshold for its application than the federal WARN Act. The federal WARN Act applies to employers with 100 or more full-time employees or 100 or more employees who work at least a combined 4,000 hours per week (exclusive of overtime).  Delaware WARN also applies to employers who employ 100 or more full-time employees, but differs  in that it also includes employers of 100 or more employees (including part-time) who work at least a combined 2,000 hours per week. Thus, Delaware WARN may apply to employers not covered by federal WARN such as those who have a significant amount of part-time employees.

Second, the Delaware WARN requires that employers give advance notice of a “relocation,” whereas a “relocation” is not an event that triggers notice requirements under the federal WARN Act’s obligations. The term “relocation” is defined under Delaware WARN as the removal of all or substantially all of the industrial or commercial operations of an employer to a different location 50 miles or more away that results in a layoff. Theoretically, an employer who moved their location 50 miles (even within the state) could trigger Delaware WARN if the move resulted in any layoffs of employees who are not offered employment at other facilities.

Third, the Delaware WARN contains broader notice requirements than federal law. Under both the Delaware and federal WARN Acts, an employer is required to provide the required written notice to affected employees and their unions, the state dislocated worker unit (the Delaware Department of Labor Division of Employment and Training) and the chief elected official of the unit of local government within which a closing or layoff is to occur. The Delaware WARN goes on to require notice to the Delaware Workforce Development Board (established pursuant to the federal Workforce Innovation Opportunity Act) for the locality in which the mass layoff, plant closing or relocation will occur.  In the written notice itself, the Delaware WARN also requires, in addition to the notice requirements of the federal WARN, that employers include general information regarding any payouts, severance packages, job relocation opportunities and retirement options that will be offered to the displaced workers, and whether the employer is self-insured for workers’ compensation insurance.

The final difference worth noting concerns enforcement of the statutory requirements. Under the federal WARN Act, actions for alleged noncompliance may be brought in a federal court by affected employees. Delaware WARN grants the Delaware Department of Labor the ability to promulgate rules with “provisions that allow the parties access to administrative hearings for any actions of the Department under this [Act].” Additionally, the Delaware Department of Labor has broad authority to “examine any information of an employer” in connection with any investigation or proceeding under the Act to determine whether a violation occurred.

The new Delaware WARN will impose requirements on employers that are not currently subject to the federal WARN Act, as well as additional requirements for those employers who are subject to the federal law equivalent. The penalties for violations are steep.  Employers who fail to give proper notice are liable for up to 60 days back pay and benefits for each affected employee, as well as fines and attorneys’ fees.  All Delaware employers contemplating layoffs should consult with their legal counsel whether the Delaware WARN applies to their particular circumstances.