News from New York State Department of Labor

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Labor Dept. Announces Legislation Requiring Companies to Give a 90-Day Layoff Notice or Face Strict Penalties

New York's Worker Adjustment and Retraining Notification Act's Provisions Among the Most Stringent in the Nation

ALBANY, NY (09/02/2008)(readMedia)--

At an event in Watervliet, NY, State Labor Commissioner M. Patricia Smith today announced the signing by Governor David A. Paterson of the State Worker Adjustment and Retraining Notification (WARN) Act. The state law will provide more advance notice to workers facing layoffs than the federal WARN law. It requires private employers with 50 or more workers to notify employees and the Department of Labor at least 90 days prior to a plant closing or mass layoff. Businesses that fail to file a WARN notice in the allotted time period will be subject to penalties of up to $500 per day for each violation. The new law also gives the Commissioner the authority to order relief, including back wages and unpaid medical benefits, for employees who don't receive the required notice.

The need for a stringent law at the state level comes on the heels of a number of companies that closed their doors in recent years and gave their workers little or no prior notification. The federal WARN Act only applies to companies that employ 100 or more workers and requires only 60 days notice to these workers. The federal law also lacks an administrative enforcement mechanism, which requires workers facing job loss to sue their employers privately. The new law will close this loophole, which has allowed employers who fail to provide workers with a timely WARN notice to escape liability for their violations.

"For too long, workers in New York, given no notice in the face of immediate layoffs, have been unintentional victims of a federal law with limited enforcement provisions," said Commissioner Smith. "This important legislation signed by Governor Paterson will ensure that many more workers in New York State are afforded the courtesy of advance notice by their employers. Just as important, those employers who don't play by the rules will be sanctioned accordingly."

The setting of the event at Tech Valley Printing has significant meaning for more than 150 workers across the Capital Region. On February 7, 2008, the Department of Labor received a WARN notice indicating that the company had laid off 50 workers the day before. This is also known as a "backdoor" WARN Notice. Additional information gathered after the fact indicated that more than 150 workers were released by the company, not the 50 previously reported. Upon finding this out, the Department of Labor left numerous unreturned messages at company headquarters. Without company cooperation, the Labor Department embarked on a highly proactive outreach campaign. On February 21, the Labor Department swiftly arranged a job fair for 41 affected employees, who represented only a third of the company's workforce.

"The actions against the workers of Tech Valley Printing are a textbook example of what not to do," said Commissioner Smith. "Had the Labor Department and local officials been provided sufficient notice by the company, we could have intervened on behalf of the workers, offered them services while they were still employed, and even helped them land new jobs so they wouldn't have had to collect unemployment insurance in the first place. Unfortunately, with no enforcement mechanism in place, the company got off scot-free and the workers were the ones who ultimately paid the price."

Congressman Michael McNulty said, "Families in New York State are struggling in the wake of a global economic downturn, and the last thing they need is to show up to work and be locked out without any notice. The events at Tech Valley Printing demonstrated a compelling need for stronger WARN legislation, and I applaud the Governor and the Commissioner for bringing this law forward at the state level."

While citing the chronology of events at Tech Valley Printing as a textbook example of why new legislation at the state level is necessary, Commissioner Smith also commended those companies who continued to play by the rules under federal law, even though they would have faced no real penalty had they not. In particular, she noted Portola Packaging, a manufacturer of plastic bottle caps for dairy and water industries located in Clifton Park, NY, which filed a WARN Notice announcing the closure of the company and 78 layoffs with the Department of Labor on May 23, 2008. Given the advance notice, the Department of Labor immediately reached out to the company to finalize details for employment services and laid out plans for a job fair. On August 13 at company headquarters, 20 employers, including GE Infrastructure Energy, Fortitech, Latham Manufacturing Corp, Momentive Performance Materials and Quad Graphics came to company headquarters for an on-site job fair for affected workers. Every worker who showed up had a lead on a new job.

The WARN Act is widely viewed as a good business practice that provides displaced employees with more time to prepare for layoffs, thus increasing the chances that they will find a new job in a reasonable amount of time. It gives rapid response teams at the state and local levels more time to assist affected employees through targeted job fairs and recruitments, and offers the Department of Labor ample time to meet with employees to talk about the unemployment insurance process, services provided at local One-Stop Career Centers, and essential training/retraining services. When there is no notice, it is more difficult for the Department of Labor to coordinate with displaced workers on reemployment services. This increases the time they may spend collecting unemployment insurance.

Commissioner Smith thanked Governor Paterson and both houses of the State Legislature, including the bill's sponsors, Assemblywoman Patricia Eddington and Senator Joseph Robach, for their tremendous bipartisan support of the bill. She also commended Senator Hillary Rodham Clinton for bringing this national issue to the Labor Department's attention, and thanked her for her continued push for stronger WARN provisions for workers across the state and nation.

Assembly Majority Leader Ron Canestrari said, "We understand the challenges businesses face in a struggling economy. We also understand that economic realities can lead to difficult decisions with unfortunate consequences. But this law is about more than a bottom line. The WARN Act is about affording the hard working men and women of this state the common courtesy and respect they deserve so that they have a fighting chance to land on their feet. I applaud Governor Paterson, Commissioner Smith and my colleagues in the legislature for enacting this crucial protection for our workforce into law."

Senator Neil Breslin said, "Reform of the WARN act at the federal level has long been overdue. Given our changing economy, closings and layoffs often have devastating effects. I am confident that the strengthening of this law at the state level will ensure increased protections for our workers."

Assemblymember Susan John, Chair of the Assembly Committee on Labor, said, "I applaud Governor Paterson for signing this important legislation into law. New York is taking the lead to ensure that hard-working men and women are protected when an employer downsizes their workforce. In today's economic climate, the sooner an employee knows of an impending layoff, the sooner they can prepare to take the steps necessary to provide for their family. I am pleased to join my colleagues and the Commissioner in safeguarding our hardworking families' financial future."

For more information, please visit www.labor.ny.gov.