Worker Adjustment & Retraining Notification Act (WARN)...

[jaemmons]

If an employer is paying compensation in lieu of the notice requirements (payments stop the earlier of 60 days after notice should have been provided or the employee find another job), are these payments to be treated as severance payments for retirement plan purposes? I feel that they are, but if someone could clarify or refute my logic, please do so. Thanks

[JanetM]

The warn penalty statew you have to pay wages and benefits just as if they were employees for the 60 day period. Seems since you have to do that, the benefits that would include retirement and health and welfare.

Kirk Maldonado - can you confirm?

[dcoderre]

What's the concensus on this under the final regulations? Would it make any difference if the pay wasn't required under WARN? For example, what if an ee gives 2 weeks notice, but the employer has them terminate immediately but pays them for the 2 weeks? Or what if the "in lieu of notice" pay is required by a collective bargaining agreement? For unemployment purposes, this pay is treated differently than pure severance pay, but it seems more likely it's treated as severance under the final 415 regulations. On the other hand, there is an argument that it's regular pay that would have been paid had the employee not severed employment before the notice period expired.