COVID-19 has resulted in significant challenges for businesses, leading some businesses to lay off employees and, in the most severe instances, close their doors entirely. Dealing with reductions in force are challenging enough from an operational standpoint, but certain employers must also ensure they comply with state and federal laws when shutting down or reducing operations.
On November 11, 2020, Gov. Andrew Cuomo signed A10674A/S8748 into law, amending New York State’s Worker Adjustment and Retraining Notification (NY WARN) Act and expanding the entities that need to be notified if it is triggered.
The concept of the NY WARN Act and federal WARN is simple. These laws were originally intended to provide employees with a certain amount of notice so that employees losing their job would have a little bit of lead time to plan. However, over time, and as reflected by the NY WARN Act’s most recent amendments, the purpose of these statutes has expanded so that any and all potential stakeholders in the community that could potentially be affected by the businesses change in operation are also notified.
NY WARN Overview
NY WARN Act applies to private sector businesses with 50 or more full time workers in New York State and can be triggered under a number of circumstances, including:
The requisite “notice” employers must provide for one of the above mentioned triggering events is 90 days. The contents of the notice are laid out in the statute and associated regulations.
Beyond providing affected employees with the notice, the employer must also provide notice to the employees’ representatives (i.e., union, if applicable), the New York State Department of Labor, and the local workforce investment boards.
The new amendment to the NY WARN Act now adds more entities to the list that require notification, including (1) the chief elected official of the unit or units of local government and the school district or districts in which the NY WARN Act event will occur; and (2) each locality that provides police, firefighting, emergency medical or ambulance services, or other emergency services to the site of employment where the NY WARN event is occurring.
The purported intent of adding these recipients is so local governments may become aware of the potential loss of tax revenue. The amendment is effective immediately.
Federal WARN Overview
Federal WARN is slightly less inclusive from an employer coverage standpoint in comparison to the NY WARN Act and only covers employers with 100 or more employees.
Often times New York employers are safe to assume that by complying with a New York State specific law, they are also complying with a federal law. This is usually the case because New York laws require more of employers than the correlating federal law (e.g., minimum wage laws). While the NY WARN Act and federal WARN Act greatly overlap conceptually, there are many differences, which require careful attention.
Penalties and Advice
While the WARN concept seems simple in nature, the requirements imposed on businesses under federal and state law are complicated and incredibly nuanced. Penalties for non-compliance can include back pay of wages and benefits for employees as well as civil penalties. While not the subject of this alert, there are numerous employer defenses and exemptions to NY WARN Act and federal WARN that are fact specific. Covered employers considering large employment actions that could trigger the NY WARN Act and/or federal WARN are well advised to seek counsel for assistance in correctly navigating these tricky waters.
Goldberg Segalla has significant experience navigating employers through the NY WARN Act and federal WARN scenarios. For more information or for immediate guidance, contact: