Telework can affect who is entitled to advance notice of impending unemployment
Last time we discussed how determining an employee’s Family and Medical Leave Act eligibility is often dependent on defining the location of your telecommuters’ work sites. Another statute calling for a similar determination is the Worker Adjustment and Retraining Notification (WARN) Act.
Enacted in 1988, the WARN Act requires businesses employing at least 100 full-time workers to give 60 days’ written notice of a plant closing or mass layoff to affected employees or their representatives. The goal is to give workers time to get a new job or enter a training program, for instance.
The term “plant closing” includes the shutdown of a “single site of employment” that causes 50 or more full-time employees at the site to suffer an “employment loss” during any 30-day period.
A “mass layoff” (not a plant closing) causes an employment loss at a “single site of employment” during any 30-day period for either 50 or more full-time employees and at least a third of the full-time staff; or 500 or more full-time employees.
When a company with telecommuters considers a shutdown or layoff, it must ask: Where are the telecommuters’ “single sites of employment?” If they are home offices, employees won’t be entitled to notice because the home office won’t meet the 50-person minimum. And in some cases, employees at the central office might lose their right to notice: Since they can’t count telecommuters, the office might not meet the 50-person minimum.
Determining a telecommuter’s single site of employment might be tricky. The WARN Act doesn’t define the term. A Department of Labor (DOL) regulation does, but it offers limited help. It provides, in part:
“For workers whose primary duties require travel from point to point, who are outstationed, or whose primary duties involve work outside any of the employer’s regular employment sites (e.g., railroad workers, bus drivers, salespersons), the single site of employment to which they are assigned as their home base, from which their work is assigned, or to which they report will be the single site in which they are covered for WARN purposes.”
The regulation does not specifically discuss home-based workers. But one court recently expressed the view that the regulation doesn’t apply to employees with a “fixed place of work,” calling into question whether it covers employees who work full-time at home.
A number of older cases, however, suggest that the regulation might apply to employees who spend at least some time working from home. In a case called Ciarlante v. Brown & Williamson Tobacco Corp., the plaintiffs were traveling salespeople who were assigned to geographical districts and worked from home.
The parties disputed whether the plaintiffs’ “single site of employment” was the employer’s administrative center in Virginia or the districts where they worked. The trial court ruled it was the Virginia office, but the court of appeals wasn’t so sure. It ruled that the regulation was applicable to the home-based plaintiffs but that further fact-finding was necessary to decide whether that office satisfied the test.
Similarly, in a case called Kephart v. Data Systems International, Inc., the plaintiffs and the employer disagreed about whether 12 employees – some of whom worked from home and some of whom worked from regional offices – should be counted in the tally of employees terminated at the company’s Kansas headquarters.
The plaintiffs argued that these employees’ single site of employment was the Kansas office; the employer, that their worksites were their home or regional offices. As in Ciarlante, the court considered the regulation relevant to determining where the home-based employees worked but ruled that a conclusive determination required additional fact-finding.
Unfortunately, even if the WARN Act regulation does apply to home-based workers, it does not necessarily clarify where they work. As the Kephart court noted, the regulation “apparently permits an employee to be assigned to one of three sites (the employee’s home base or place where work is assigned or place to which the employee reports) without offering useful guidance concerning the analysis when these locations are not the same.”
If, for example, a telecommuter is assigned to his personal residence as his “home base,” but he receives assignments from, and reports to, the company’s central office, which location is his “single site of employment?”
The absence of clear guidance on how to determine home-based workers’ single site of employment is a sign of the WARN Act’s age (1988). The regulations need to be updated – ideally, in a way that would assure that members of a large workforce are not denied notice of a plant closing or mass layoff simply because they telework. At a minimum, the regulations should give employers with telecommuters better warning on the scope of their duty to warn.
