Wednesday, February 04, 2009

NY WARN Act took effect on 2/1/09

The NY WARN Act will require employers with 50 or more employees to give 90 days advance written notification to employees for mass layoffs, plant shutdowns, or relocation. The Act includes a $500 per day penalty for each day notice is not given. It also includes exceptions such as the big three (i.e. war, terrorism, and natural disaster, oh my), if the layoff/closing was the result of the end of a contract/project that the employee knew to be of limited duration, if the need for the notice was not "reasonably foreseeable" (ABL sees litigation over this one), if the notice would have adversely affected the employer's active attempts to secure capital that would have staved off the job losses/closing, or, where the triggering event is caused by an "industrial action" (whatever that is).

This law applies to more companies than does the federal WARN Act, which applies to companies employing 100 or more workers and only requires 60 days notification.

The Act also appears to have been hastily drafted (i.e. legislators trying to look like they are doing something in response to the recession). For example, it is not clear what amounts to a relocation (i.e., does the termination of an employee who works from home and the hiring of another employee a "relocation"? What about consolidation of several offices?).

Although their heart may be in the right place, this measure makes it more onerous for companies (and thus less likely) to do business in NY. Although the same can be said of any regulation -- the benefits of the NY WARN Act outweigh its benefits. Borrowing from Lord Byron, it is better to have worked and lost than never to have worked at all.

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