On January 30, 2009 the New York State Department of Labor ("DOL") issued an Emergency/Proposed Rule governing the interpretation and implementation of the New York State Worker Adjustment and Retraining Notification ("WARN") Act, which took effect on February 1, 2009. The regulations are an attempt to clarify numerous ambiguities raised by the statutory language of the New York WARN Act.
As discussed in our August 2008 Client Alert http://www.proskauer.com/news_publications/client_alerts/content/2008_08_14, the New York WARN Act differs from the federal WARN Act in several significant ways. Notably, the New York Act has a 90-day advance notice requirement, compared to the 60-day period in the federal law. In addition, the New York Act applies to relocations, which are not covered in the federal law. Further, the New York Act reduces the threshold number of employees for a mass layoff from 50 to 25 (and from 500 to 250 for large layoffs), and applies to private sector New York employers with 50 or more employees as opposed to the 100-employee minimum under federal law. Administrative enforcement by the Labor Department is available under the New York Act, in addition to a private right of action, whereas the federal law only provided for a private right of action.
These provisional regulations will be subject to a public comment period which will be announced in the New York State Register on February 11, 2009.
Highlighted below are some key points addressed in the Emergency/Proposed Rule of which employers should be aware.
Definitions
- "Affected Employee." Definition expanded to include employees who reasonably may be expected to experience an employment loss as a result of relocation or covered reduction in hours by the employer (statute referred only to plant closing and mass layoffs).
- "Employer." Explicitly includes for-profit and not-for-profit business enterprises. Calculation of total weekly hours for statutory coverage includes overtime hours that are earned on a regular basis.
- "Employment loss." Specifies that the definition does not a include reduction in hours that occurs because the employer is participating in a shared work program.
- "Mass layoff." Identifies the date of an employee's layoff as the date on which s/he is no longer employed and that employment is not extended by an employer's payment of severance pay, vacation pay, personal leave, etc., to the employee.
Notice
- The regulation clarifies that notice is required in a plant
closing, and not in all employment losses. The statute reads as
follows:
- Statute: "An employer may not order a
mass layoff, relocation, or employment loss unless, at
least 90 days before the order takes effect, the employer gives
written notice...." (emphasis added)
- Regulation: "No employer may order a mass
layoff, plant closing, relocation, or a covered
reduction in work hours, unless, at least 90 calendar days
prior to any planned employment loss, the employer
provides notice...." (emphasis added)
- Statute: "An employer may not order a
mass layoff, relocation, or employment loss unless, at
least 90 days before the order takes effect, the employer gives
written notice...." (emphasis added)
- Service of Notice
- Notice may NOT be sent by e-mail.
- Notice must be on official letterhead of the employer
- Contents of Notice
- Contents of notice mirror federal requirements
except that employees and their
representatives must receive information concerning unemployment
insurance, job training, and re-employment services for which
affected employees may be eligible. The regulation provides the
minimum information that satisfies this requirement.
- Contents of notice mirror federal requirements
except that employees and their
representatives must receive information concerning unemployment
insurance, job training, and re-employment services for which
affected employees may be eligible. The regulation provides the
minimum information that satisfies this requirement.
Transfers
- Specifies whether the offer of a transfer to another location constitutes an "employment loss." The text is nearly identical to the Federal WARN regulations, with the exception that there is some specificity as to what a "reasonable commuting distance" is when the site of employment is being moved to a location within New York City or Long Island, or elsewhere within the state.
Temporary Employment
- Specifies that the employer has the burden of proof to show that an employee clearly understood at the time of hire that the job was temporary.
- Specifies that "at-will" employment is not considered "temporary employment."
Enforcement
- Administrative Enforcement
The regulations set forth the procedures to be followed in an administrative enforcement action by the DOL.
- Civil Penalty
- Regulations clarify that the $500/day civil penalty for each day of the employer's violation is imposed in the aggregate and not individually for each affected employee or other party that failed to receive notice.
- Requires that employers making payments of back pay and fringe
benefits as a result of violation must include with the final
payment of wages information on unemployment insurance
benefits.
- Damages
- Provides methods for calculating "average regular rate of compensation" and "final rate of compensation."
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
