Answer to Question #257647 in Microeconomics for Emaaem

Question

In many europeon countries firms are legally required to provide one or more months advance notice if they plan to close plant or layoff workers to negotiate with employees and government over whether the closing

Answer 1

The negotiation with the employees and the government is so as to determine whether the closing is qualified or not.

The worker adjustment and retraining notification act(WARN) is employed in this case. This is a law that requires employers to provide advance notice and planning mechanism to their workforce and communities, in the event of a qualified plant closing or mass layoff.

Under WARN, plant closing occurs when a covered employer closes a facility or discontinues an operating unit, permanently or temporarily, affecting at least 50 workers, not counting part time workers, at a single site of employment.

Mass layoff will occur when there is a layoff of 500 or more workers( not counting part time workers) at a single site of employment during a 30 day period, or layoff of 50 to 499 workers (not counting part time workers) when these layoffs constitute 33% of the employer's total active workforce ( not counting part time workers) at a single site of employment.