• New York WARN Act Imposes Additional Requirements
  • August 28, 2008 | Authors: Willis J. Goldsmith; Wendy C. Butler
  • Law Firm: Jones Day - New York Office
  • Companies contemplating or instituting a plant closing or mass layoff in New York should know that Governor David Patterson has signed into law S.8212, the New York State Worker Adjustment And Retraining Notification Act, (the "NY WARN Act"), which imposes requirements on employers in addition to those currently imposed by the federal WARN Act.* Generally, the federal WARN Act requires employers of 100 or more employees to provide employees affected by a plant closing or mass layoff with 60 days’ advance notice. By contrast, under the NY WARN Act, employers with 50 or more employees must provide 90 days’ advance written notice of mass layoffs, plant closings, or relocations. More specifically, the NY WARN Act requires employers to provide advance written notice if (1) a mass layoff results in employment losses during a 30-day period affecting at least 25 full-time employees representing at least 33% of the workforce, or at least 250 full-time employees; or (2) a relocation involving a removal of all or substantially all of the industrial or commercial operations of an employer to another location at least 50 miles away, regardless of whether there are any employment losses. Notice must be given to affected workers, the New York State Department of Labor ("NYS DOL") and local workforce investment boards.

    The legislature may also have intended to require notice in the event of a plant closing that results in an employment loss affecting 25 employees during a 30-day period. However, the statute does not clearly say this. It requires notice in the event of an "employment loss," which is defined in a manner that includes the phrase "mass layoff" and thus depriving the term of any independent significance. Although the actual notice requirement section of the law does not include a plant closing as a triggering event, other sections of the law suggest that the legislature must have intended a plant closing to be a triggering event.**

    Employers are exempt from the notice requirements if the need for notification was not reasonably foreseeable at the time the notice was required; the employer was actively seeking capital or business when the notice was required and such capital or business, if obtained, would have enabled the employer to avoid or postpone the relocation or layoff; the closing or layoff was due to a natural disaster; the operation being closed was a temporary facility or project closed upon completion of the project; or if the action constitutes a strike or lockout.

    The NY WARN Act grants affected employees and their representatives the right to sue employers, as individuals and in representative actions, for violations of the Act. In addition, the NY WARN Act grants the NYS DOL enforcement authority and the ability to promulgate rules "necessary to carry out" the act. The NY WARN Act requires the NYS DOL, "at a minimum," to create a rule allowing parties to access administrative hearings for actions brought by the NYS DOL for violations. Under the NY WARN Act, employers who violate the act must provide back pay and the cost of benefits (including medical expenses incurred by an affected employee that would have been covered under a benefit plan) for the period of the employer’s violation, up to a maximum of 60 calendar days, to each terminated employee who lost his or her employment without receiving the required notification. Employers are also liable to pay civil penalties of not more than $500 for each day of violation.


    * The alert is based upon a New York State Senate bill that, as enacted and signed, appears to contain several drafting errors.

    ** This is just one of several examples of ambiguous provisions that, when read together, create confusion as to the actual requirements of the law. For example, other provisions seem to indicate that notice may be required in the event of any employment loss, and of any relocation, irrespective of whether it affected at least 25 employees.