On August 5, 2008, New York State Governor David Paterson signed a new law entitled the New York State Worker Adjustment and Retraining Notification Act ("NY WARN Act"). The NY WARN Act will be effective on February 1, 2009. The NY WARN Act is similar to, but in some ways broader than, the federal Worker Adjustment and Retraining Notification Act ("Federal WARN Act"). The Federal WARN Act generally requires covered employers to provide 60 days advance written notice in the event of a "mass layoff" or "plant closing." The NY WARN Act, on the other hand, requires employers in New York State to provide 90 days advance written notice in the event of "a mass layoff, relocation or employment loss" as follows:

"Mass Layoff": Under the NY WARN Act, a "mass layoff" includes a reduction in force over a 30 (and sometimes 90) day period resulting in employment losses at a single site of employment for (i) at least 33 percent of the employees (excluding "part-time" employees) and at least 25 employees (excluding "part-time" employees) or (ii) at least 250 employees (excluding "part-time" employees).

In contrast, a "mass layoff" under the Federal WARN Act includes only reductions in force over a 30 (and sometimes 90) day period resulting in employment losses at a single site of employment for (i) at least 33 percent of the employees (excluding "part-time" employees) and at least 50 employees (excluding "part-time" employees) or (ii) at least 500 employees (excluding "part-time" employees).

"Relocation": Under the NY WARN Act, a "relocation" is defined as "the removal of all or substantially all of the industrial or commercial operations of an employer to a different location fifty [(50)] or more miles away" from the current location. The Federal WARN Act does not require notice for a relocation unless the relocation also constitutes a "mass layoff" or "plant closing."

The NY WARN Act, as enacted, appears to contain several ambiguities and/or drafting errors. For example, in the event of a "mass layoff, relocation, or employment loss," the NY WARN Act requires notice to be provided to, among others, "affected employees." Since "affected employees" is defined as "employees who may reasonably be expected to experience an employment loss as a consequence of a proposed plant closing or mass layoff by their employer," one could arguably read the statute as not requiring notice to be provided to any employees in the event of a "relocation," unless that "relocation" also constitutes a "mass layoff" or "plant closing." In a non-binding opinion letter, dated August 25, 2008 ("Opinion Letter"), the New York State Department of Labor confirmed its interpretation that "[t]he relocation intended by the [NY WARN] Act is a relocation of the employer's business that is necessitated by the plant closing or mass layoff....Neither the intent of the [NY WARN] Act nor any of its provisions would extend the WARN requirement to relocations unrelated to a plant closing or mass layoff...."

"Employment Loss": The NY WARN Act states that "[a]n employer may not order a mass layoff, relocation or employment loss" unless the employer provides 90 days advance written notice. Since "employment loss" is defined as, among other things, "an employment termination, other than a discharge for cause, voluntary departure or retirement," one could arguably read this provision to require employers to provide 90 days notice prior to the termination of any employee, regardless of whether there is a "mass layoff," "relocation" or "plant closing." This appears to be another ambiguity and/or drafting error. For example, (i) the legislative history states, in part, that the purpose of the statute is to require employers to provide notice "before ordering a mass layoff, relocation, or plant closing;" (ii) the Federal WARN Act, upon which this new law is based, requires notice prior to ordering a "mass layoff" or "plant closing;" and (iii) as stated above, notice is only required to be provided to, among others, "affected employees" and this definition appears to require a "mass layoff" or "plant closing." In its Opinion Letter, the New York State Department of Labor stated that "the Legislature's intent and that of the Department [of Labor]...is limited to requiring a state WARN notice only where at least 25 employees would be affected by the plant closing or mass layoff."

"Plant Closing": The NY WARN Act does not expressly require employers to provide notice in the event of a "plant closing" (although it does contain a definition of "plant closing"). Nonetheless, for the same reasons described above, the New York State Department of Labor, in its Opinion Letter, stated that the NY WARN Act requires notice in the event of employment losses resulting from "plant closings." Under the NY WARN Act, the definition of a "plant closing" includes a temporary or permanent shutdown of a single site of employment, or one or more facilities or operating units within a single site of employment, that results in employment losses over a 30 (and sometimes 90) day period at the single site of employment for 25 or more employees (excluding "part-time" employees). In contrast, the definition of a "plant closing" under the Federal WARN Act requires employment losses over a 30 (and sometimes 90) day period of at least 50 employees.

Although the notice requirement of the NY WARN Act is modeled after the requirements of the Federal WARN Act, there are significant differences between the Federal and NY WARN Acts including, among other things, the following:

  • The NY WARN Act applies to private sector employers that employ 50 or more full-time employees, whereas the Federal WARN Act applies to employers with 100 or more full-time employees.  
  • The NY WARN Act requires 90 days advance written notice prior to a "mass layoff" or "plant closing" (based on the New York State Department of Labor's interpretation), whereas the Federal WARN Act only requires employers to provide 60 days advance written notice prior to any "mass layoff" or "plant closing."  
  • As set forth above, the number of employment losses required to trigger a "mass layoff" or "plant closing" are significantly fewer under the NY WARN Act than under the Federal WARN Act.  
  • The NY WARN Act provides for both a private right of action by employees and enforcement by the New York State Department of Labor. In contrast, the Federal WARN Act does not permit enforcement by the government.  

The Federal WARN Act provides an exception for "unforeseeable business circumstances" for both "plant closings" or "mass layoffs." Under the NY WARN Act, it appears that this exception may only be available for "plant closings" and not "mass layoffs."

Interestingly, although the NY WARN Act requires 90 days prior written notice, the liability for back pay and employee benefits for an employer who fails to provide such notice is capped at 60 days (in addition to a penalty of not more than US$500 per day of the violation and, if awarded by a court, reasonable lawyer's fees). This penalty is similar to an employer's liability under the Federal WARN Act.