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New York Adopts State Worker Adjustment and Retraining Notification Act

Fall 2008Cole Schotz DocketAttorney: Randi W. Kochman

Given the bleak economic climate, reductions in workforce and other employment termination programs are likely to increase as employers tighten their belts.  Before undertaking any restructure, however, Tri-State employers must ensure compliance with all applicable laws, including the newly-enacted “New York State Worker Adjustment and Retraining Notification Act” (“NY WARN”).  Effective February 1, 2009, New York will become one of a growing number of states to have a WARN Act.  Although NY WARN and the federal Worker Adjustment and Retraining Notification Act (“WARN”) are similar, there are many key differences of which employers should be aware.

Unlike WARN, which requires employers with 100 or more employees to provide 60 days’ advance notice of a “plant closing” or a “mass layoff,” NY WARN has stricter notice requirements.  NY WARN requires employers with 50 or more employees to give at least 90 days advance written notice of a “mass layoff,” “relocation,” or “plant closing” to affected employees, the New York State Department of Labor, and the local workforce investment boards.  In calculating the notice period, NY WARN examines the number of calendar days (not business days).

Under the New York law, it also is easier to trigger the required advance notice.  For instance, under NY WARN, a “mass layoff” occurs when there is a reduction in force within a 30-day period that causes an “employment loss” at a single site of employment of at least 33% of the employees and at least 25 full-time employees, or of at least 250 full time employees without consideration of the percentage of employees.  This is in contrast to WARN’s 50-employee and/or 500-employee threshold.  A “plant closing” under NY WARN is defined as a permanent or temporary shutdown of a single site of employment (or any facilities or operating units within a site) where the shutdown results in an employment loss of at least 25 full-time employees within a 30 day period.  In contrast, federal law requires that at least 50 employees suffer an employment loss to qualify for a plant closing.  Finally, a “relocation,” defined as “the removal of all or substantially all of the industrial or commercial operations of an employer to a different location fifty miles or more away,” will qualify for notice under NY WARN.  The federal WARN contains no such relocation provision.

Employers should also be aware of other key differences between NY WARN and WARN, including NY WARN’s provision that notice is not required if the triggering event is a physical calamity or an act of terrorism or war.  Similarly, while both laws provide for exceptions in the event of strikes and lockouts, sales, unforeseeable business circumstances, faltering companies, natural disasters and layoffs beyond six months, the laws address these issues quite differently.

Both NY WARN and WARN provide for damages to each affected employee of up to 60 days’ back pay, and under NY WARN employees with even fewer days on the job are entitled to recover half the number of days the employee worked during any period in which notice is not given.  In addition to a private right of action, NY WARN also authorizes the New York State Department of Labor to enforce the statute.  In short, before terminating any group of employees, New York-based employers should consider the application and impact of state and federal WARN laws.

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