New York State Strengthens WARN Act Regulations to Address Post-Pandemic Employment

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Patricia Tsipras Michael J. Fortunato

July 21, 2023

The New York State Department of Labor recently published new regulations interpreting the New York Worker Adjustment and Retraining Notification Act (“NY WARN” or “the statute”) to address the climate of post-pandemic employment.  See the amended regulations (effective June 21, 2023).

A Short Primer on NY WARN

NY WARN requires private businesses with 50 or more full-time employees in New York State to provide 90 days’ advance notice of closures, layoffs, relocation, and certain work hour reductions to all affected employees and other interested parties.  This advanced notice is designed to give employees, their families, and their communities time to transition, seek new employment, and enter workforce training programs with assistance from the Department of Labor and Local Workforce Development Boards.

Notable Amendments to NY WARN

1. Employer coverage and remote workers. NY WARN applies to private businesses with 50 or more full-time employees in the State.  The amended regulations expand the definition of a “covered employer” to include employees who work remotely but are “based” at an employment site.
2. Exceptions, generally. NY WARN sets forth certain exceptions under which the 90-day notice requirement may be reduced.  The amended regulations provide that, to rely on one of these exceptions, an employer must receive a determination from the Commissioner of Labor that the employer has met all of the elements of the exception.
3. Unforeseeable business circumstances. Under the WARN Act, employers can claim an exception to the 90-day notice requirement for unforeseeable business circumstances.  That exception applies to plant closings, mass layoffs, relocations, or covered reductions in work hours caused by business circumstances that were not reasonably foreseeable at the time that the 90-day notice would have been required.  The amended regulations state that a public health emergency, such as a pandemic, may qualify for the unforeseeable business circumstances exception.
4. Faltering Company Exception. An employer may qualify for a reduced notice period under the statute’s faltering company exception.  The amended regulations establish that this exception applies only to plant closings and not to mass layoffs, relocations, or covered reductions in work hours.
5. Temporary layoffs. The notice requirement of NY WARN does not apply to individuals on temporary layoffs.  The amended regulations now define a “temporary layoff” as “a mass layoff with a duration of less than a consecutive six-month period and a planned return of employees after the layoff period ends.”
6. Sale of business provision. The amended regulations clarify that sellers will not have an obligation to give WARN notice if the transfer of employees to the purchasing employer is a good-faith condition of the purchase agreement, but the purchasing employer does not uphold that condition.  In such a scenario, the purchasing employer, not the seller, would have to provide notice.
7. Additional Requirements for Notices. The amended regulations require additional information in notices, including, but not limited to, the total number of full- and part-time employees in the State and at the impacted site.
8. Pay in Lieu of Notice. The amended regulations contain a new provision, “Payments in Lieu of Notice of Separation or Layoff.”  This provision outlines a situation wherein employers can offset liability under the statute if they maintain “an employment agreement or a uniformly applied company policy” that provides for a notice period.
9. Back Pay Calculations. An employer who fails to give required notice under the statute is liable to affected employees for back pay.  The amended regulations provide details regarding how to calculate back pay for hourly and non-hourly employees.

Employer Takeaways

Given the complexity of NY WARN and the lead time required to comply with its obligations, employers who are planning closures, layoffs, relocations, or reductions in work hours impacting employees in New York should seek legal counsel to ensure that they are compliant with the law.

This article is designed to provide one perspective regarding recent legal developments, and is not intended to serve as legal advice.  Always consult an attorney with specific legal issues.