Joining New Jersey, which passed similar “mini- WARN” legislation in 2007, New York Governor Paterson signed into law the New York State Worker Adjustment and Retraining Notification Act on August 5, 2008, which requires advance notice to employees in the event of certain mass layoffs, relocations, and plant closings.

Although the New York law is similar to the existing federal Worker Adjustment and Retraining Notification (“WARN”) Act, the state law, which takes effect on or about February 1, 2009, is far more stringent in several critical respects:

  • The state law applies to employers with at least 50 full-time employees, whereas WARN applies to employers with at least 100 full-time employees. Thus, small employers that may be exempt from the federal WARN Act may be covered by the new state law.
  • The state law requires at least 90 days advance notice of a covered mass layoff, relocation, or plant closing, whereas the WARN Act requires only 60 days advance written notice of a covered plant closing or mass layoff.
  • The notice triggering job loss thresholds are lower under the state law. Notice is required under the state law when at least 25 full-time employees who represent at least 33% of the workforce (or 250 employees, regardless of workforce percentage) will suffer job loss due to a mass layoff, a plant closing, or a relocation (defined as the removal of all or substantially all of the commercial or industrial operations of an employer to a location 50 miles or more away).

WARN, on the other hand, does not contain provisions regarding relocations, and requires double the number of affected employees – 50 full-time employees who represent at least 33% of the workforce (or 500 employees, regardless of workforce percentage) for a mass layoff, and 50 fulltime employees for a plant closing – before the notice provisions are triggered.

  • Under the state law, notice must be provided to employees, any representative of the employees, the New York State Department of Labor, and the local workforce investment boards for the locality in which the mass layoff, reduction, or plant closing will occur. The WARN Act only requires notice to the employees or representative of employees and to the State or the entity designated by that State to respond. The actual form of the notice, however, does not differ between the state law and the WARN Act.

Failure to comply with the state law will result in similar penalties as those available under the WARN Act (up to 60 days of back pay, plus benefits), even though there is a longer notice period required under the state law. However, employers also can be assessed civil penalties not exceeding $500 for each day of the employer’s violation.

An employer’s liability can be offset in certain circumstances under state law, such as by payments made to discharged employees. Moreover, if an employer proves that its violation of the state law was in good faith and that the employer had reasonable grounds to believe its actions were not violative of the state law, the amount of liability and/or civil penalty may be further reduced.

Under both the federal and state law, employers can take advantage of several exemptions and exceptions from the notice requirements, including the faltering business exception, the unforeseen business circumstances exception, the sale of business exception, the natural disaster exception, the completion of project exception, and the strike and lockout exception. Further, under both state and federal law, if employees slated to suffer a covered job loss (due to a consolidation or relocation) are offered the opportunity to transfer, under certain circumstances those employees need not be counted among the employees suffering an “employment loss.”