State and federal Worker Adjustment and Retraining Notification (WARN) Acts require companies to provide notice before taking certain actions to reduce the size of their workforce. For employers conducting reductions in force in New York, the state law will almost always be more restrictive. Thus, complying with New York’s WARN Act will usually also satisfy the federal requirements.

[Here’s a succinct infographic on the New York WARN Act.]

Covered Employers

The New York WARN Act requires employers with at least 50 total employees to give written notice before implementing covered workforce reductions affecting at least 25 employees.

“Part-time employees” and properly classified independent contractors do not count in determining whether a WARN event will occur. However, the definition of “part-time employee” is multifaceted and likely to differ from how the company normally classifies its workers.

Timing of Notice

The New York WARN Act requires written notice 90 days before a “plant closing,”  “mass layoff,” or “relocation”. Each of those terms has a nuanced definition under the law.

WARN Notice Events

A “plant closing” occurs where an employment site (or one or more facilities or operating units within an employment site) will be shut down, and the shutdown will result in an “employment loss” for 25 or more employees during any 30-day period.*

A “mass layoff” occurs where there is to be a group reduction in force that does not result from a plant closing, but will result in an employment loss at the employment site during any 30-day period* for: (a) 250 or more employees, or (b) 25-249 employees if they make up at least 33% of the employer’s active workforce.

*Sometimes the 30-day periods referenced above extend to 90-days in determining whether WARN notices are required.

New York’s WARN Act also refers to a “relocation” situation that is not part of the federal WARN Act. In New York, a “relocation” occurs where all or substantially all of the industrial or commercial operations of an employer will be removed to a different location 50 miles or more away from the original site of operation and 25 or more employees suffer an employment loss.

An “employment loss” occurs in any of these situations: (a) employment terminations other than a discharge for cause, voluntary departure, or retirement; (b) layoffs exceeding six months; and (c) a reduction in an employee’s hours of work of more than 50% in each month of any six-month period. Hence, companies may need to issue WARN notices even if the intention is not to permanently end the employees’ employment.

Exceptions

WARN notices may not be required every time the above conditions exist. The exceptions, however, are narrowly applied. Any company seeking to rely on one should discuss the matter with an attorney experienced in working with the WARN Acts.

For example, the WARN Acts recognize a “faltering company” exception. But the mere fact that the company must reduce its workforce isn’t enough to qualify for the exception. (Or else there would be no point to the laws in the first place!). This exception only applies to plant closings and is limited to situations where a company has sought new capital or business in the attempt to stay open and giving notice would ruin the opportunity to get the new capital or business.

Similarly, an “unforeseeable business circumstances” exception applies to closings and layoffs caused by business circumstances that were not reasonably foreseeable when notice would otherwise have been required. But, the employer still must give as much notice as possible.

Here are some other scenarios where WARN notices may not be required:

• The company offers to transfer employees to a different work location within a reasonable commuting distance.
• The reduction of force results from the completion of a project for which the employees were hired with the understanding that their employment was only for the limited duration of the project (e.g., seasonal employment).
• A new company will continue employment in connection with the sale of a business.
• A closing or layoff is the direct result of a natural disaster, such as a flood, earthquake, drought, or storm.
• The company permanently replaces economic strikers in accordance with the National Labor Relations Act.

WARN Notice Recipients

When notices are required, they must be sent to:

• affected employees,
• their unions (if applicable), and
• certain local, state, and federal government officials.

When the New York State Department of Labor receives a WARN notice, it publishes the information on its website.

Penalties

If a company should have given notice under the New York WARN Act and does not, then it may be held liable for damages to each employee who should have received notice. The employer may have to pay up to 60 days’ pay and benefits, plus civil penalties and attorneys’ fees.

Plan Ahead to Comply with the New York WARN Act

This law forces employers to plan months ahead before reducing their workforces by large numbers. The exceptions generally do not protect employers just because they didn’t know about or want to comply with the notice requirements. As soon as a reduction in force becomes foreseeable, companies must contemplate WARN Act compliance. Sometimes, these requirements will end up forcing employers to delay their desired employment actions. Advance planning and consultation with an experienced labor attorney are usually the best means of avoiding or alleviating that outcome.

You may also be interested in my free webinar: Conducting Your Next Reduction in Force.