Mass layoffs have unfortunately become an economic reality during the COVID-19 pandemic. Employees should know, however, that federal and New York employment law can provide important rights for employees who lose their jobs in a mass layoff.
The federal Worker Adjustment and Retraining Notification (WARN) Act protects employees of business with 100 or more full time workers. An employer who conducts a mass layoff (generally defined as laying off 500 workers or 1/3 of a worksite) must give employees 60 days’ notice. In other words, the paychecks cannot stop tomorrow; they must continue for 60 days. And, if they do, the employee has the right to bring a lawsuit in federal court.
The New York WARN Act goes further and providers additional protections: It applies to business with 50 or more New York workers and kicks in when a closing or layoff affects 25 workers or 1/3 of all workers at a work site. In addition, the New York WARN Act requires that an employer provide 90 days’ notice of a layoff.
Employers who fail to provide notice are liable to employees for back pay (wages for the notice period) and other benefits. They can also be forced to pay the employee’s legal fees.
Both laws do provide for exceptions: for faltering companies where the company is actively seeking capital, in unforeseeable business circumstances, or for natural disasters. The second is almost certain to be the refuge of businesses stricken by the pandemic.
But it is not a get-out-of-jail-free card. Even in unforeseeable business circumstances, both acts still require companies to notify employees of a coming layoff as soon as practicable.
The New York Department of Labor has issued minimal guidance on its website about what the NY WARN Act’s exceptions mean during the ongoing pandemic. It has emphasized the applicability of the WARN requirements: “If your business is forced to close, please provide notice a soon as possible and identify the circumstances that required the closure.” Further, the Department has affirmed that “[t]he WARN Act requirement to provide 90 days’ advanced notice has not been suspended because the WARN Act already recognizes that businesses cannot predict sudden and unexpected circumstances beyond an employer’s control, such as government-mandated closures, the loss of your workforce due to school closings, or other specific circumstances due to the coronavirus pandemic.”
Employees let go with less than the legally mandated notice should not accept an employer’s assurance that the coronavirus has made it impossible for the employer to comply with the WARN Act, nor that notice was given as soon as practicable. Courts have held that whether an employer provided notice as soon as practicable is a “fact intensive” determination. And, even in bankruptcy proceedings, employees have been found eligible to recover wages for the failure to provide notice of layoffs or terminations.
Employees who believe they may have been laid off without adequate notice should contact an employment lawyer immediately.