At the end of June 2023, the New York Department of Labor (DOL) issued final amended regulations to the state’s Worker Adjustment and Retraining Notification (NY WARN) Act. The amendments, which are now effective, impose significant new requirements on employers conducting mass layoffs.
Similar to, but more expansive than, its federal counterpart, NY WARN requires certain New York businesses to provide at least 90 days’ notice of employment loss to affected employees (and other government entities) in the case of plant closings, mass layoffs, relocation, and certain reductions in work hours. According to the DOL, the amendments “address the post-pandemic employment climate,” and “simplif[y] language to ensure businesses better understand their obligations.” We’ve outlined the key updates below.
The most significant change of the regulations is the new process by which employers seek an exception from the 90-day notice period requirement. Under this new process, an employer seeking an exception must submit certain required documentation demonstrating eligibility for the exception to the state’s labor commissioner, who will then decide whether an exception is warranted. The required documentation – which must be submitted within 10 business days of the notice being provided to the commissioner – includes, among other things:
After completing an investigation, the commissioner may notify the employer of its determination or, if the investigation determines that the employer failed to establish the elements of any exception, the commissioner will “continue the enforcement action for determining the employer’s liability for violation of the [a]ct.” To gather additional information, the commissioner also can convene an “investigative conference” at which an employer may be accompanied by a lawyer or other representative.
NY WARN applies to employers with 50 or more full-time employees “within New York State.” In a nod to the post-pandemic workplace, the regulations now clarify that individuals “who work remotely but are based at the employment site” will be counted toward this threshold. However, the regulations do not elaborate on how to determine whether employees are “based at” a particular employment site in the state. Further, this expanded definition could cover employers with less than 50 employees working physically in the state, if the employer has remote workers outside the state who report into a New York office.
The regulations also amend the “unforeseeable business circumstances” exception to the notice requirement to include public health emergencies, such as a pandemic “that results in a sudden and unexpected closure” as an additional situation that may excuse full compliance with NY WARN.
The regulations now distinguish between a temporary layoff (which is excluded from the notice requirements) and a permanent layoff that requires notice under NY WARN. A “temporary layoff” does not exceed six consecutive months with a planned return of employees, whereas a “permanent layoff” is a mass layoff extending beyond a consecutive six-month period.
NY WARN requires notices to be served on affected employees, employee representatives, the labor commissioner and the local Workforce Investment Board where the site of employment is located. The regulations now require that notices also are sent to the following:
The content required to be contained – and also now be provided electronically – in the notice to the labor commissioner must include:
Notably, the regulations also greatly expand the content of the notice required for affected employees, which now broadly comprises “[a]ny additional information known at the time of the notice and relevant to the separation.” This includes “information on severance packages or financial incentives if the employee remains and works until the effective date of the mass layoff, relocation or employment loss, available dislocated worker assistance, and, if the planned action is expected to be temporary, the estimated duration.”
Under the existing framework, employers can reduce their liability for failing to provide the required 90 days’ notice by making voluntary and unconditional payments that are not otherwise required pursuant to a contract or law, or by paying wages and benefits for the violation period.
The regulations now provide that an employer also may make payments “in lieu of notice of separation or layoff” if all of the following conditions are met:
As this new section does not materially alter the existing framework for employers to reduce their liability by paying wages and providing benefits for the violation period, it appears that this latest amendment was intended to provide an additional method for reducing an employer’s liability under NY WARN, such as in the case of a preexisting employment agreement providing for notice periods or payments in lieu of such notice periods.
The regulations also amended the notice provisions with respect to a sale of all or part of a business. Notably, if the transfer of employees is a condition of the purchase agreement, and that condition is not upheld by the purchasing employer (i.e., the purchaser does not employ the seller’s employees), the purchasing employer is obligated to provide the required notice.
Although it’s not part of the amended regulations, New York employers should note that in May 2023, the DOL launched an updated WARN portal, which employers now may use to submit required notices and other documents under NY WARN, as described above. Employers considering layoffs should consult with counsel as soon as possible to ensure compliance with the additional onerous burdens imposed by the updated regulations.