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Iowa ‘Mini’ WARN Act Goes Into Effect July 1, 2010

A new state law imposing stringent notice requirements on Iowa employers engaging in business closings or mass layoffs goes into effect Thursday, July 1, 2010. Near the end of the 2010 session, the Iowa Legislature passed a state version of the federal Worker Adjustment and Retraining Notification (WARN) Act. Often referred to as a “mini” WARN Act, the new state law actually imposes tougher requirements on employers than the federal law.

Under the federal WARN Act, employers with at least 100 employees are required to provide 60 days’ advance notice of a plant closing or mass layoff of 50 or more workers at a single site.

Under the new state law signed by Governor Chet Culver on March 22, 2010, Iowa employers must notify employees or their representatives, as well as the Iowa Department of Workforce Development, of:

  • a business closing or mass layoff resulting in the termination of 25 or more full-time employees; or
  • the layoff of at least 25 employees in a 30-day period.

Written notice must be provided 30 days before the business closing or mass layoff, and there are specific rules on what the notice must include.

Many Iowa businesses were already subject to the federal WARN Act. Now, however, many smaller Iowa businesses will be captured by the state “mini” WARN law. If there’s a possibility your business may be closing or laying off at least 25 employees, take the time to become familiar with the notice provisions of both acts. Failure to provide notice can result in significant penalties, which will make the unfortunate closing or layoff that much more distasteful.

The May 2010 issue of Iowa Employment Law Letter — edited by Greg Naylor of Whitfield & Eddy, P.L.C., in Des Moines — featured more details about the new law, including how the notices must be handled if a business is sold. The new law also allows some exemptions to the notice requirements — for example, for certain faltering businesses or when “unforeseeable circumstances” cause the layoffs or closing.