New York Department of Labor Says Employers Should Prepare Now for February 2009 Lay-offs to Comply with New York WARN Act
As previously reported on this website, New York has enacted its own version of the federal Worker Adjustment and Retraining (“WARN”) Act, NY WARN §860-a(3), which is set to go into effect on February 1, 2009. (See New York Enacts State WARN Act: Covers More Employers and Contains Longer Notice Periods than the Federal WARN Act). The New York WARN Act is broader in scope than the federal law, as it applies to any employer with 50 or more employees (compared with 100 or more under the federal law) and provides that employers must give employees 90 days' advance notice (compared with 60 days under the federal law) of any plant closing, mass layoff or plant relocation. Although the NY statute provides that it is not to go into effect until February 1, 2009, this month the New York State Department of Labor (DOL) posted a notice on its website advising employers who may be planning plant closings, layoffs or plant relocations in February 2009 to provide the required 90 day notice now, before the effective date of the statute. The DOL notice states:
The New York State Workers Adjustment and Retraining Notification (WARN) Act requires employers to provide 90 days’ notice prior to a plant closing, mass layoff or relocation occurring on or after February 1, 2009. Notice must be provided to affected employees and their representatives, the New York Department of Labor and the local workforce investment board at least 90 days before the event. For employers planning layoffs shortly after the new law takes effect, notice would have to be provided prior to the law’s effective date to meet the 90-day requirement. The state WARN Act applies to private employers with 50 or more workers who layoff at least 25 employees. Violations are enforceable by the Commissioner of Labor and are subject to civil penalties and back wages. (http://www.labor.state.ny.us/)
A prior publication issued by the DOL stated that “Employers must provide a state WARN notice as required by the Act starting February 1, 2009 when the law takes effect.” It appears from the current DOL notice set forth above, however, that the DOL is taking the position that notice must be provided now (in December 2008), 90 days in advance of the statute’s effective date, for any mass layoff, plant closing or relocation that will actually take place in February, 2009.
In addition to enforcement actions by the NY Commissioner of Labor, individual employees, their representatives and local governments may also file a court action for a violation of the NY WARN Act. The Act imposes a civil penalty of $500 for each day of the employer’s violation, and employers are also liable for back pay and other benefits for up to 60 days of the violation. The law further provides that the Commissioner of Labor may reduce the employer’s liability if the employer acted in good faith and had reasonable grounds to believe that its conduct did not violation the law. Arguably, given the February 1, 2009 effective date and the language in the DOL’s earlier publication, a New York employer could have a good faith belief that it does not have a current legal obligation to send any notices now, as the law has not yet gone into effect. It is apparent from the above DOL notice, however, that the DOL’s current position is that there is a legal obligation to send notices now for February 2009 layoffs, plant closings and relocations. Employers should therefore plan accordingly, rather than taking the chance of invoking the good faith defense.
All plant closings, mass layoffs, and relocations raise a number of legal considerations, in addition to federal and state notice obligations, that should be reviewed with counsel. If you wish to discuss these issues, please contact any of our attorneys.