Employment Law Report
Would the WARN Act Apply in the Event of a Federal Budget Sequestration?
On July 30, 2012, an Assistant Secretary of the U.S. Department of Labor issued an advisory and guidance to federal contractors concerning the applicability of the Worker Adjustment and Retraining Notification Act (WARN Act) to possible layoffs occasioned by federal government sequestration on January 2, 2013, under the Balanced Budget and Emergency Deficit Control Act of 1985, and the Budget Control Act of 2011, should the Congress and President not come to agreement on a federal budget. That guidance was “no” — the WARN Act would not be triggered by such action and affected, covered federal contractors would not be in violation of the WARN Act for NOT providing 60 days’ notice of mass layoffs or a plant closing affecting at least 50 employees.
The issuance of this guidance has been criticized by the Republican House Education and Workforce Chairman, John Kline, and the Subcommittee on Workforce Protections Chairman, Tim Walberg, in a letter to Secretary of Labor Hilda Solis. They argue that the Department of Labor’s guidance has no legal effect and may be misleading employers into not following the WARN Act’s requirements.
With the recent agreement on a short-term budget extension, this issue has now been pushed off for several months.
The Labor Department’s guidance can be found at:
The Kline/Walberg letter may be found at: