New York State Issues New Worker Adjustment and Retraining Notification (WARN) Act Regulations

July 20, 2023 Advisory

Last month, New York State issued new Worker Adjustment and Retraining Notification (WARN) Act regulations, which impose substantial new requirements for employers conducting mass layoffs.

The New York WARN Act requires private employers with 50 or more full-time employees in New York State to provide at least 90 days' written notice for plant closings, mass layoffs and other covered reductions in work hours affecting 25 or more employees, subject to certain exceptions. Some of the more notable changes to the regulations are outlined below.

Commissioner Determination of Eligibility for Exception

The New York WARN Act provides for certain situations in which the 90-day written notice period may be reduced, including where the company is faltering but actively pursuing a realistic opportunity to obtain capital or business, unforeseeable business circumstances and natural disasters.

In perhaps the most notable change to the regulations, an employer seeking a reduction of, or exemption from, the 90-day notice period is subject to a determination of eligibility for such exception by the Commissioner of Labor. The employer must present to the Commissioner a request for consideration of eligibility for the claimed exception, in addition to the required notice to be provided. The Commissioner will require the employer to provide documentation demonstrating the applicability of an exception, following which the Commissioner will notify the employer of its determination upon “completion of an investigation into the relevant facts and circumstances.” If the Commissioner determines that the employer failed to establish the elements of any exception, the Commissioner will continue the enforcement action for violation of the WARN Act.

Also of note, a public health emergency, including but not limited to a pandemic, that results in a sudden and unexpected closure has been added to the list of examples of business circumstances which are not “reasonably foreseeable.”

Determination of Coverage

In calculating whether the employer meets the threshold of 50 employees for purposes of establishing coverage under the Act, the regulations clarify that individuals “who work remotely but are based at the employment site” are counted toward the threshold.

Temporary vs. Permanent Layoffs

The new regulations distinguish between a “temporary layoff and a permanent layoff,” with the former defined as a mass layoff with a duration less than six consecutive months and a planned return of employees after the layoff period ends. In contrast, a permanent layoff is defined as a mass layoff that extends beyond a consecutive six-month period. An employer must comply with the WARN regulation notice requirements for permanent layoffs, but such notice is not required for temporary layoffs.

Notification Requirements

The regulations previously required the WARN notice to be served on affected employees, employee representatives, the Commissioner of Labor and the local Workforce Investment Board. The new regulations expand this list, requiring notice to be given to the chief elected official of the unit or units of local government where the site of employment is located, the school district(s) where the site of employment is located, the locality that provides police, firefighting, emergency medical or ambulance services, or other emergency services, to the locale where the site of employment is located, and any other individual or entity identified in the Act.

The new regulations also expand upon the requirements for the notice that must be provided to the Commissioner of Labor, which must now be provided electronically. In particular, the notice must include additional contact information for each employee to be laid off, as well as the job title, work location, whether the employee is paid on an hourly, salary or commission basis, whether the employee is part time or full time, and any affiliation to an employee representative. The notice must also include the total number of full-time and part-time employees in New York State and at each affected site, as well as the number of affected employes at each affected site.

Notice requirements for affected employees have been expanded as well. In particular, the notice must include “[a]ny additional information known at the time of the notice and relevant to the separation,” such as information on severance packages or financial incentives, available dislocated worker assistance and the estimated duration of any planned temporary action.

Notification in Sale of Business Context

When an employer sells all or part of a business, the selling employer is generally responsible for providing any necessary WARN notice in connection with such sale. However, the updated regulations provide that if the transfer of employees is a good faith condition of the purchase agreement, and that condition is not upheld by the purchasing employer, then the purchasing employer is obligated to provide the WARN notice, and the selling employer is relieved of such obligation.

New York employers considering a mass layoff should carefully review the new regulations to ensure compliance. If you have any questions specific to your organization, please contact your regular Armstrong Teasdale lawyer or one of the authors listed below.

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