New NY WARN Act Goes Into Effect

February 2, 2009

The New York State Worker Adjustment and Retraining Notification Act (“NY WARN Act”) became effective yesterday, February 1, 2009.

The NY WARN Act is more encompassing than its federal counterpart (29 USC § 2101 et seq.) in that it applies to smaller businesses, provides for greater notice and covers layoffs involving fewer employees. New York employers should, accordingly, be mindful of the following changes:

Threshold Coverage and Notice

  • The federal WARN Act requires employers with 100 or more full-time employees to provide at least 60 days’ advance written notice to employees (or their union representatives) affected by a mass layoff or plant closing. The federal WARN Act also requires similar notice be given to designated state and local government officials.
  • In contrast, the NY WARN Act requires employers with 50 (not 100) or more full-time employees to give at least 90 days’ (not 60) advance written notice to affected employees, their union representatives, the New York State Department of Labor and the local workforce investment boards in the event of a defined “mass layoff,” “relocation” or “employment loss.”

Triggering Events

The NY WARN Act specifically defines the events that trigger its coverage. For example:

  • A “mass layoff” under NY WARN is defined as a reduction in force, which is not the result of a plant closing, resulting in an employment loss at a single site of employment during any 30 day period for at least 33% of the employees and at least 25 full-time employees. A mass layoff also occurs when at least 250 employees suffer an employment loss.

    In contrast, the federal WARN Act defines a mass layoff as an employment loss affecting at least 50 employees constituting at least 33% of the workforce, or 500 or more employees.
  • A “relocation” under NY WARN means the removal of all or substantially all of the industrial or commercial operations of an employer to a different location at least 50 miles away, regardless of the number of employees involved. (Federal WARN does not specifically address relocations that are neither mass layoffs nor plant closings.)
  • An “employment loss” under NY WARN means either a termination, other than a discharge for cause, voluntary departure or retirement; a mass layoff exceeding 6 months; or a reduction in hours of work of more than 50% during each month of any consecutive 6 month period.
  • While NY WARN does not expressly state so, it seems likely that the New York legislature intended to require notice in the event of a plant closing resulting in an employment loss affecting 25 or more full-time employees in a 30 day period. To this point, NY WARN states: “An employer may not order a mass layoff, relocation, or employment loss” without 90 days’ advance notice. (In contrast, the federal WARN explicitly requires notice in the event of a plant closing, and defines a plant closing as an employment loss affecting 50 or more employees.)

Aggregation

Under both the federal and NY WARN Acts, a 90-day employment loss aggregation period is used to determine whether a plant closing or mass layoff has occurred. This aggregation rule applies where there are insufficient losses within a 30-day period to trigger the Act, and the employment losses within the 90-day period are not the result of distinct causes or actions.

Penalties

Employers who violate the federal WARN Act may be liable to affected employees for back wages and benefits for the period of violation, up to sixty work days, in addition to civil fines (not more than $500 for each day of the employer’s violation). In contrast, when assessing penalties, NY WARN will consider the number of calendar days for which notice was not provided – rather than the number of work days within the non-compliance period. However, the total amount of penalties awarded under NY WARN may not exceed the maximum penalty for which the employer would be liable under the federal WARN Act.

Further, unlike the federal WARN Act which only provides a private right of action, the NY WARN Act authorizes the New York State Department of Labor to enforce the statute administratively.

Application

As noted above, the NY WARN Act became effective yesterday, February 1, 2009. However, the Act only applies prospectively and does not apply to layoffs that occurred before February 1, 2009.

For advice or assistance in complying with NY WARN or other reduction in force laws, please contact any member of the McGuireWoods Labor & Employment or Employee Benefits teams.

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