Labor & Employment Law Articles
N.Y. Worker Adjustment & Retraining Notification Act
Governor David Paterson recently signed into law the New York State Worker Adjustment and Retraining Notification Act (N.Y. WARN Act or N.Y. Act) which will become effective February 1, 2009. Although the N.Y. WARN Act is modeled after the federal WARN Act of 1988, the N.Y. Act will apply to employers with fewer workers, will kick in when fewer employees are affected, and will require New York employers to provide substantially longer notice.
Expanded Coverage and Notice Requirements
The federal WARN Act applies only to employers with 100 or more employees and requires that they give only 60 days’ advance written notice of a mass layoff or plant closing. Conversely, the N.Y. WARN Act requires that employers with 50 or more full-time employees (or 50 or more employees who in the aggregate work at least 2,000 hours per week) provide 90 days’ advance written notice of a mass layoff, plant closing or relocation to: (i) the affected employees; (ii) the affected employees’ collective bargaining unit, if applicable; (iii) the New York State Department of Labor; and (iv) the local workforce investment boards established pursuant to the federal Workplace Investment Act for the locality in which the employment loss will occur.
Lower Thresholds for Triggering Events
A “mass layoff” under the N.Y. WARN Act is similar to a mass layoff under the federal law, except that it is triggered when far fewer employees are affected. A mass layoff under the N.Y. Act is a reduction in force which results in an employment loss at a single site for: (i) at least one-third of the full-time employees and at least 25 full-time employees (as opposed to the federal WARN Act which requires at least 50 full-time employees be laid-off); or (ii) a total of at least 250 full-time employees (as opposed to 500 full-time employees under the federal WARN Act). Both the federal and state Acts define part-time employees as those who regularly work less than 20 hours per week or who were employed for fewer than 6 of the 12 months preceding the date on which notice is required.
Similarly, a “plant closing” under the N.Y. WARN Act is analogous to a plant closing under the federal Act, but is triggered when fewer employees are affected. Under the N.Y. Warn Act, a plant closing is a permanent or temporary shutdown of a single site of employment, or one or more facilities or operating units within a single site, resulting in an employment loss during a 30-day period of 25 or more full-time employees.
Additionally, unlike the federal WARN Act, the N.Y. Act also requires a covered employer to provide the mandated advance notice in the event of a “relocation” of all or substantially all of its industrial or commercial activities to a different location at least 50 miles away.
Exemptions from the N.Y. WARN Act
The N.Y. WARN Act provides several exceptions where employers are exempt from providing the 90 day’s written notice
- If the employer was looking for capital or business at the time the notice requirement was triggered, if the capital or business was obtained it would have prevented the termination, and the employer had a good-faith reasonable belief that providing the notice would have prevented it from obtaining the necessary capital or business;
- If the need for notice was not reasonably foreseeable at the time notice would have been required.
- If the plant closing affects a temporary facility;
- If the plant closing or mass layoff results from the completion of a specific project for which the affected employees were hired;
- If the plant closing or mass layoff is the result of a natural disaster or act of war or act of terrorism; or
- If the plant closing or mass layoff is the result of a labor strike or lockout not intended to evade the requirements of the statute
Enforcement and Penalties
While the federal WARN Act only allows employees to sue employers for failure to comply with its requirements, the N.Y. WARN Act provides for administrative enforcement by the New York State Department of Labor, as well as a private right of action for affected employees.
As under the federal WARN Act, employers that violate the N.Y. WARN Act may be held liable for each affected employee for back pay and the cost of any lost benefits or medical expenses for the period of the violation, up to a maximum of 60 days. Employers also may be required to pay attorneys’ fees to prevailing plaintiffs and civil penalties of up to $500 per day of violation.
While New York is only the fourth state (California, New Jersey and Illinois are the others) to enact a state statute with requirements that are more stringent than the federal WARN Act, employers outside of New York should be aware that bills have been introduced in Congress to amend the federal WARN Act to expand covered employers, lower the threshold for triggering events, lengthen the notice period to 90 days, allow for civil actions by the Secretary of Labor, and provide double back-pay for employer violations. Notably, the Federal Oversight Reform and Enforcement of the WARN Act, cosponsored by President-elect Barack Obama, was introduced in 2007. Thus, it is a safe bet that if the legislation is approved by Congress during Obama’s presidency he will sign it into law.