The act, modeled on its federal counterpart, the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §1201 et seq., generally requires New York employers to provide written notice to their employees, employee representatives, and government entities 90 days in advance of “plant closings” and/or “mass layoffs.” New York’s act goes farther than the federal WARN act, however, in key respects:

• New York’s act applies to employers with 50 or more employees (the federal act applies only to employers with 100 or more);
• The New York act identifies a “plant closing” as a shutdown affecting 25 or more employees (the federal act requires 50 workers to be affected);
• “Mass layoffs” under the New York act are defined as reductions in force affecting 33 percent of an employer’s workforce (at least 25 employees), or 250 employees overall; the federal act requires twice as many employees (50 employees under the 33 percent formula, or 500 employees overall) to be affected;
• The New York act requires written notice to affected employees, their representatives, the state DOL, and local workforce investment boards (a dramatic departure from the federal act, which does not require notice to each affected employee in a collective bargaining unit, if employees’ labor representatives are given notice);
• New York’s act requires notice provisions 90 days in advance of the shutdown or layoff, rather than 60 days per the federal act;
• Like its federal counterpart the New York act provides a private right of action for violations; however, it also provides for administrative enforcement by the state DOL, including $500-per-day penalties for violations of the act.

Earlier concerns about the New York act observed that its definition of an “employment loss” as any “employment termination, other than a discharge for cause, voluntary departure, or retirement”—when combined with the law’s requirement that employers provide notice in cases of “employment loss” in

addition to “mass layoff” or “relocation”—could be interpreted to mean that 90 day’s notice was required in the event of any layoff. Although DOL guidance indicated that this was not the state legislature’s intended interpretation, the newly released regulations appear to do nothing to resolve this inconsistency in the statute’s language.

In other respects, the new regulations do offer some important clarifications by defining certain key terms, and offering more extensive procedural guidance to employers. Among the noteworthy new information provided by the regulations:

• Determining if an employer is covered by the act. The act provides that “employers” are business enterprises that employ 50 or more employees, excluding part-time employees, or 50 or more employees that work, in the aggregate, more than 2000 hours per week. The regulations clarify, among other things: that the term “employers” extends to both for-profit and non-profit businesses, and to businesses contracting with federal, state, and local government entities (which are themselves exempt from the act); and that independent contractors and subsidiaries wholly or partially owned by a parent company may be treated as separate employers depending on their degree of independence from their parent companies. For purposes of determining an employer’s total number of employees, the regulations allow an employer to average the number of individuals it employs during the notice-determination period, and substitute a more “representative” number if that average is “clearly unrepresentative” of the ordinary number of employees. However, employers should note that they must count workers “on temporary layoff or leave” as employees, provided they have a “reasonable expectation of recall.”

• Clarifying the definition of “affected employees”. While the act merely defined “affected employees”—those employees who must be given notice of the impending plant closing or mass layoff—as employees who were reasonably expected to experience an employment loss from the closing/layoff, the regulations clarify that such employees do not include business partners, consultants or contract employees who are self-employed or otherwise have separate relationships with other employers. The term does, however, include an employer’s managerial and supervisory employees.

• Assessing when notice is required. The regulations call on employers to look both 90 days ahead and 90 days back to assess whether any actions, “both taken and planned,” will reach the minimum standards to constitute a covered action (i.e., plant closing or mass layoff) in the aggregate, for any 90-day period. Where that threshold is met, an employer’s notice obligations are triggered unless the employment losses should not have been aggregated because they resulted from “separate and distinct actions and causes.” The regulations further specify that if the employment losses do not all occur on the same date, the notice requirement is triggered by the date of the first individual termination. Where employees are terminated in groups, each individual group is entitled to a full 90 days notice.

• Form and service of notice. The regulations encourage employers to provide voluntary notice of impending employment losses to employees even where the action may not constitute a plant closing or mass layoff. (Additional notice requirements may also be voluntarily imposed through a contract or collective bargaining agreement.) However, where such voluntary notices given more than 90 days in advance of an employment loss do not contain all the information required by the act, and the employment loss is ultimately determined to be a
  
  

  covered action, the employer is responsible for ensuring that all of the required information is provided in time. The regulations specify that notice is to be provided on the official letterhead of the employer and “using a reasonable and timely method of delivery designed to ensure its receipt…includ[ing] first class mail, or personal delivery with optional signed receipt.” Email notice is not acceptable; however, notice can be served by inserting notice into envelopes containing pay or receipts for the direct deposit of pay.

• Content of notice. The regulations specify the categories of information that must be provided in the notice to its various recipients. In the case of affected employees, this includes (in a language understandable to the employee): the expected date of the employment loss event; a statement as to whether the action is expected to be permanent or temporary; a statement as to whether “bumping” rights exist; employer contact information (for seeking further information); information concerning unemployment insurance, job training, and re-employment services “for which affected employees may be eligible.” Notice to the Commissioner of Labor, meanwhile, must include: the name and address of the affected employment site; employer contact information; the name of the employer’s liaison with the DOL; the names and job titles of affected employees; the anticipated schedule of the action, including the expected date of the first termination; a “bumping” rights statement and statement as to whether the action is expected to be permanent or temporary. (Notices to employee representatives and local Workforce Investment Boards require information similar to the categories described above.)
  
  

  The regulations further contain clarification and explanation of special circumstances which may affect the application of the act, such as the extension or postponement of a layoff period, the transfer of employees to different employment sites, and/or the layoff or termination of employees whose employment was limited to the completion of a particular project or undertaking (i.e., temporary employees). Moreover, the regulations enumerate and describe a set of potentially applicable exceptions to the act, including circumstances in which the failure to comply with the act’s notice requirements does not result in liability to the employer, because of the occurrence of: a so-called “faltering company;” unforeseeable business circumstances; strikes and/or lockouts; and natural disasters.
  
  

  The administrative-enforcement and civil penalty provisions of the act, together with the potential for private-action damage awards, make it important—especially in the face of an uncertain economy—that employers familiarize themselves with, and understand, the newly effective act and its detailed new regulations before undertaking potentially qualifying employment actions. Employers considering reductions-in-force or other workforce consolidations, in particular, are encouraged to review the act and regulations well in advance of putting such plans into practice.
  
  

  This Legal Alert provides a brief analysis or comments on matters related to labor and employment law and does not purport to be a substitute for advice of counsel on specific matters. The application of New York’s Mini-WARN Act and implementing regulations will depend on the facts presented in each case. As such, counsel should be sought for specific situations.
  
  

  For more information, please contact Peter Spinelli or the Harris Beach labor and employment attorney with whom you usually consult, or call (585) 419-8800.
  
  

  Harris Beach has offices throughout New York state, including Albany, Buffalo, Ithaca, New York City, Niagara Falls, Rochester, Saratoga Springs, Syracuse and Yonkers, as well as Newark, New Jersey.