Category: Uncategorized

By Christine Malafi

Around the country, states have proposed legislation that would require insurers who provide property insurance to cover business interruption during the coronavirus pandemic. These pending laws have not seen much movement since being introduced; however, as the pandemic continues, state legislatures have focused more on this issue. These states are considering mandatory business interruption coverage laws and applying them retroactively: California, Louisiana, Massachusetts, Michigan, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, South Carolina and the District of Columbia introduced legislation that generally requires carriers insuring against loss or damage to property to cover business interruption during a declared state of emergency due to COVID-19, even if an exclusion applies, or declaring that the presence of a virus is a physical loss.

In New York,  A1937/S4711 are  currently pending bills, originally introduced as A10226/S8211 in late March 2020. These are the highlights of that proposed legislation:

1. Proposal requires certain perils to be covered under Business Interruption insurance coverage during the COVID pandemic.
2. This bill would apply to those business which had business interruption insurance in effect on March 7, 2020, the date of the Governor’s Executive Order 202, the declaration of a State of Emergency related to COVID-19.
3. It is limited to businesses with less than 250 full time employees.
4. It provides for automatic renewal of insurance, at the current rate, during the pandemic.
5. It provides that any policy of insurance with a virus exclusion permitting the insurer to deny coverage shall be deemed to have that exclusion deemed null and void.
6. Insurers would pay/indemnify their insureds who have filed business interruption claims and then the insurers would apply to the Superintendent of the Department of Financial Services for “relief and reimbursement from funds collected and made available for this purpose and pursuant to a special purpose assessment (to recover the expenses from insurance companies, other than life & health insurers).
7. Superintendent is to establish submission of procedures, qualification, and eligibility for reimbursement.

Other New York bills are pending on the issues, including A10327, which relates to providing such coverage to “insureds with coverage who operate programs and services including a mental health outpatient provider . . .  substance use disorder treatment provider . . . community-based program funded under the office of mental health . . .” and A5396/S4333 which establishes the temporary hospitality and business relief fund and creates a credit for certain hospitality businesses affected by the COVID-19 pandemic.

Pending bills, at both the State and Federal levels, attempt to mandate insurance coverage for risks that were, arguably, never intended to be assumed by the insurers, for which premiums were never collected.

If passed, this could pose serious solvency concerns for insurers, who have not set reserves for these losses. All policyholders would have claims at the same time. This could arguably end the existence of business interruption insurance in its entirety and could endanger other, clearly covered claims.

The Federal bill, the Business Interruption Coverage Act of 2020 is more expansive than the state proposals, as it mandates coverage for COVID, acts of terrorism, and extreme events be made available to insureds, but permits exclusion of such coverage if the insureds do not pay for the additional coverages This bill would preempt state law pursuant to the McCarran-Ferguson Act (1945).

This pending legislation, if passed, would be challenged, and legal challenges could hold up payments for years in any event, which would result in no payments to assist small businesses in their viability now. The bills will most likely be challenged under the contracts clause, the due process clauses, and the takings clause of the U.S. Constitution.

This article was co-written by Rosa M. Feeney of Lewis Johs Avallone Aviles, LLP.

By Christine Malafi

Ten months ago, in March 2020, NYS enacted legislation authorizing sick leave for employees subject to a mandatory or precautionary order of quarantine due to COVID-19. In January 2021, NYS recently issued updated guidance on the use of COVID-19 sick leave. Before diving into the updated guidance, here is a review of the initial legislation.

March 2020 NY COVID-19 Paid Sick Leave Legislation

January 2021 NY COVID-19 Paid Sick Leave Updated Guidance

On January 20, 2021, NYS updated its guidance on the use of COVID-19 sick leave. This guidance supplements the prior guidance on the application of COVID-19 sick leave; all prior guidance still remains in effect. The new guidance significantly expands on employers’ obligations set forth in the prior legislation.

If an employee tests positive for COVID-19 following a period of mandatory quarantine, the employee (1) cannot report to work, (2) is automatically deemed subject to a subsequent mandatory order of isolation from the NY Department of Health; and (3) is entitled to paid sick leave under the NY COVID-19 sick leave law (even if the employee already received NY COVID-19 sick leave for the first period of mandatory quarantine). However, to receive NY COVID-19 sick leave for a subsequent time, the employee is required to submit documentation of a positive COVID-19 test result from a licensed medical provider. Employees can qualify for COVID-19 sick leave for up to three orders of quarantine.

Additionally, the guidance appears to require employers to provide employees with paid leave if the employer mandates that the employee does not report to work due to potential exposure to COVID-19. If this happens, the guidance states that the employee must be paid at their regular rate of pay until the employer allows the employee to return to work or the employee becomes subject to an order of quarantine. If the employee is subject to an order of quarantine, then the employee would receive NY COVID-19 sick leave for the duration of that order.

The COVID-19 sick leave legislation passed in 2020 provided that leave was only available in the event an employee was subject to an order of quarantine. This new guidance seems to go beyond that statute. Consequently, this updated guidance may be subject to legal challenges because the NY Department of Labor cannot create obligations that go beyond statutory requirements; the DOL can only promote regulations that interpret a statute.

If you have any questions regarding the new COVID-19 paid sick leave guidance, please contact us.

UPDATE:

March 2021 NY COVID-19 Vaccination Leave

Beginning March 12, 2021, New York employees will receive paid time off to be vaccinated against COVID-19. Both public and private employees will receive up to four hours of paid leave per injection without having to use benefit time, including New York’s mandated sick leave. Employers must pay employees their regular rate of pay for the time off. Additionally, employers cannot discriminate or retaliate against employees who request to take a leave of absence to receive a vaccination. Learn more here.

By Christine Malafi

UPDATE: As of May 2021, this rule has been rescinded. Click here for updated guidance.

On January 6, 2021, the U.S. Department of Labor (“DOL”) issued a final rule changing the standard determining if a worker is an employee or an independent contractor under the Fair Labor Standards Act (“FLSA”).[1] According to the DOL, the purpose of this change is to make it easier to identify which workers are employees covered by minimum wage, overtime, and other provisions of the FLSA. This new rule reaffirms an “economic reality” test to determine whether an individual is in business for himself (e.g., independent contractor) or is economically dependent on a potential employer for work (e.g., FLSA employee).

Federal and State Issue

The determination of whether a worker is an employee or independent contractor is both a federal and state issue. The DOL views misclassification as denying access to critical benefits and protections to which employees are entitled by law. Employee misclassification also reduces taxes paid to federal and state governments and lowers contributions to state unemployment insurance and workers’ compensation funds.

New York State Guidance

According to the New York State Department of Labor, independent contractors must be free from supervision, direction, and control in the performance of their duties. They are in business for themselves, offering their services to the general public. Signs of independent contractor status include, but are not limited to, a person who has an established business, advertises in the electronic and/or print media, sets their own schedule, and pays their own expenses.

An employer-employee relationship may exist (rather than an independent contractor relationship) if the employer: (1) chooses when, where, and how workers perform services; (2) provides facilities, equipment, tools, and supplies; (3) directly supervises the services; (4) sets the hours of work; (5) requires exclusive services; (6) sets the rate of pay; (7) requires attendance at meetings and/or training sessions; (8) asks for oral or written reports; (9) reserves the right to review and approve the work product; (10) evaluates job performance; (11) requires prior permission for absences; and (12) has the right to hire and fire.

Federal Guidance

The new federal guidance describes two “core factors” that are most probative to this question: (1) the nature and degree of control over the work; and (2) the worker’s opportunity for profit or loss based on initiative and/or investment. Further, the test identifies three other factors that serve as additional guidelines in the analysis: (3) the amount of skill required for the work; (4) the degree of permanence of the working relationship between the worker and the potential employer; and (5) whether the work is part of an integrated unit of production.

1. Nature and Degree of Control Over the Work
   • Whether the worker exercises substantial control over key aspects of the performance of the work (e.g., setting their schedule, selecting certain projects, working with little or no supervision, and performing work for others). The DOL states that requiring a worker to comply with health and safety standards, specific legal mandates, contractually agreed-upon deadlines, and insurance policies does not constitute the type of control under this factor.
     
     
2. Worker’s Opportunity for Profit/Loss
   • Whether the worker has an opportunity for profit or loss based on their initiative (e.g., managerial skill and business judgment) or their investment (e.g., managing investments in, or capital expenditure on, equipment, materials, or helpers).
     
     
3. Amount of Skill Required for the Work
   • Whether the work requires specialized skill or training that the employer does not provide.
     
     
4. Degree of Permanence of the Working Relationship Between the Worker and Employer
   • Whether the duration of the work relationship is definite or sporadic. It should be noted that seasonal work does not necessarily show independent contractor status.
     
     
5. Part of an Integrated Unit of Production
   • Whether the work is an element of the employer’s integrated production process for a good or service (e.g., if the work is analogous to a production line).

These factors are not exhaustive, and no single factor is dispositive. However, the DOL stated that if the core factors point toward the same classification (whether the worker is an employee or independent contractor), then the weight of those factors will most likely outweigh the additional factors.

The final rule was published in the Federal Register on January 7, 2021 and the effective date of the final rule is March 8, 2021. However, the Biden administration does not favor this rule and it is possible that they will delay its implementation. The Biden campaign’s labor platform included a commitment to restore the Obama administration’s aggressive wage-hour misclassification agenda. This would create a more rigid test for qualifying workers as independent contractors than this rule.

What if a Business Does Not Comply?

If a business is discovered to have improperly treated an employee as an independent contractor, the business will be held accountable for employment taxes for that worker, as well as unemployment insurance and workers’ compensation contributions, with associated fines and penalties.

If you have any questions regarding the classification of employees versus independent contractors, please contact us.

Learn more about this issue here.

Thank you to Daniel Axelrod for his research and writing assistance with this article.

[1] This rule is different from the prior factors used to distinguish employees from independent contractors. The prior factors were: (1) the nature and degree of the potential employer’s control; (2) the permanency of the worker’s relationship with the potential employer; (3) the amount of the worker’s investment in facilities, equipment, or helpers; (4) the amount of skill, imitative, judgment, or foresight required for the worker’s services; (5) the worker’s opportunities for profit or loss; and (6) the extent of integration of the worker’s services into the potential employer’s business.

On January 15, 2021, Christine Malafi joined Gettry Marcus, CPA, P.C. for their continuing webinar series on the recently passed Economic Aid Act (“EAA”), which has amended the Paycheck Protection Program (“PPP”) and now includes an Employee Retention Credit (“ERC”). 

Some of the key areas that were discussed include:

• SBA deadlines to apply for PPP 1 and PPP 2 loans through March 31, 2021
• Business type eligibility (and ineligibility) including certain non-profit organizations
• Calculating the maximum PPP loan borrowing amount
• PPP loan terms, maturity date, and loan forgiveness application deadlines
• Updated definition of the “Covered Period” to utilize a PPP loan
• Expanded permittable uses of a PPP loan, including new eligible “Covered” expenses such as: 
  • Operations expenditures
  • Property damage costs
  • Supplier costs
  • Worker protection expenditures
• Reapplying for a PPP 1 loan if all or a portion of the loan was originally returned or the borrower did not accept the full eligible loan prior
• Employee Retention Credit (“ERC”)
• and more.

VIEW WEBINAR REPLAY HERE.

As of May 28, 2021, the EEOC has released updated guidance. Visit our updated article here.

Since the first vaccines were administered in mid-December, employers and employees alike have questioned whether the workplace can require vaccination as a condition of employment. It will likely be months before the vaccine is available to most Americans, and thus it may be premature for private sector employers to propose a “vaccination for return-to-work” policy. However, on December 16, 2020, the U.S. Equal Employment Opportunity Commission issued guidance regarding employers’ obligations for mandatory COVID vaccination programs.

Essentially, the EEOC guidance provides that employers can require that employees get vaccinated as a condition of returning to work if their vaccination policies comply with the Americans with Disabilities Act (“ADA”), Genetic Information Nondiscrimination Act (“GINA”), Title VII of the Civil Rights Act of 1964, and other workplace laws.

If an employee declines to get vaccinated based on a disability[1] or a “sincerely held religious belief,” the employer must offer a reasonable accommodation to the employee, such as working remotely.[2] If no accommodation is possible, [3] then an employer may prohibit the employee from entering the business if that employee presents a direct threat to the health and safety of persons in the workplace, but the employer may not necessarily terminate the employee. Employers should evaluate these four factors to determine whether a direct threat exists: (1) duration of the risk, (2) nature and severity of the potential harm, (3) likelihood that the potential harm will occur, and (4) imminence of the potential harm.

An employer does not have to provide a particular reasonable accommodation if it poses an “undue hardship,” which means “significant difficulty or expense.” An accommodation that would not have posed an undue hardship prior to the pandemic may pose one now.[4] Prior to the pandemic, many accommodations did not pose a significant expense when considered against an employer’s overall budget and resources. However, the sudden loss of some or all of an employer’s income stream because of the pandemic is a relevant consideration. Also relevant is the amount of discretionary funds available at this time and whether there is an expected date that current restrictions on an employer’s operations will be lifted (or new restrictions will be added or substituted).

Additionally, EEOC guidance provided that the administration of a COVID vaccine by an employer is not a “medical examination” for purposes of the ADA and administering the vaccine or requiring employees to present proof of vaccination does not implicate GINA.

If you have questions regarding mandatory COVID vaccines in the workplace, please contact us. 

Thank you to Daniel Axelrod for his research and writing assistance with this article.

[1] Title VII as amended by the Pregnancy Discrimination Act specifically requires that women affected by pregnancy, childbirth, and related medical conditions be treated the same as others who are similar in their ability or inability to work. This means that a pregnant employee may be entitled to job modifications, including telework, changes to work schedules or assignments, and leave to the extent provided for other employees who are similar in their ability or inability to work.

[2] On November 8, 2020, the New York State Bar Association passed a resolution urging the state to consider enforcing mandatory COVID vaccination, even if people object for “religious, philosophical or personal reasons.” The EEOC, however, did not issue any guidance on that resolution.

[3] If a job may be performed only at the workplace, there may be reasonable accommodations that could offer protection to individuals whose disability puts them at greater risk from COVID and who therefore request such actions to eliminate possible exposure. Even with the constraints imposed by a pandemic, some accommodations may meet an employee’s needs on a temporary basis without causing undue hardship on the employer. If not already implemented for all employees, accommodations for those who request reduced contact with others due to a disability may include changes to the work environment such as designating one-way aisles; using plexiglass, tables, or other barriers to ensure minimum distances between customers and coworkers whenever feasible per CDC guidance or other accommodations that reduce chances of exposure.

[4] For example, it may be significantly more difficult in this pandemic to conduct a needs assessment or acquire certain items, and delivery may be impacted, particularly for employees who may be teleworking. Or, it may be significantly more difficult to provide employees with temporary assignments, to remove marginal functions, or to readily hire temporary workers for specialized positions.

It is that time of the year again. 2021 is nearly here and New York State has once again increased the minimum wage and the overtime exempt salary threshold effective December 31, 2020.

Minimum Wage Increase

Employers generally must pay nonexempt employees at least the minimum wage. Minimum wage throughout New York State may vary based on the employer’s size, geographic location, or industry.  There are different hourly rates for workers in the fast food industry and those who receive tips. The table below outlines New York State’s 2021 minimum wage:

Next year, for Nassau, Suffolk, and Westchester Counties, the minimum wage will rise to $15.00 per hour on December 31, 2021. For the remainder of New York State, annual increases to minimum wage will continue until the rate reaches $15.00 per hour. The annual increases will be published by the New York State Commissioner of Labor starting October 2021. These annual increases will be based on percentage increases determined by the New York State Director of the Division of Budget, based on economic indices, including the Consumer Price Index.

* Unlike previous years, there is no distinction among number of employees for New York City employers.

Increased Salary Threshold for Overtime Exemption

Both federal law (Fair Labor Standards Act (FLSA)) and state law (New York State Minimum Wage Act and applicable regulations) generally require the payment of overtime wages for work performed after 40 hours per week. However, there are exemptions for certain salaried employees from federal and state minimum wage and overtime pay requirements. In addition to New York State’s minimum wage increase, the minimum salary that must be paid to workers classified as exempt under New York State Labor Law’s administrative and executive exemptions increased for 2021. As with minimum wage, the salary thresholds vary depending on the employer’s location and the number of employees. The table below outlines the revised salary thresholds in New York State:

For Nassau, Suffolk, and Westchester Counties, the salary threshold will increase to $1,125.00 per week ($58,500.00 annually) on December 31, 2021.

* Numbers provided are pursuant to New York State law and are higher than the federal FLSA thresholds.  Employees must meet certain duties tests in addition to their earnings or they will otherwise be eligible for overtime pay.

Future Minimum Wage Implications Across the Country

Twenty-nine states and D.C. have minimum wages above the federal minimum wage of $7.25 per hour. During the 2020 election, Florida residents voted to raise the state’s minimum wage, from $8.56 per hour to $15 an hour, in steps by 2026. Florida marks the eighth state in the county to adopt a $15 minimum wage (the other states are California, Connecticut, Illinois, Maryland, Massachusetts, New Jersey, and New York). This begs the question as to if there will be a national $15 minimum wage. According to a June 2019 study by the Congressional Budget Office, it is estimated that raising the minimum wage to $15 per hour would bring 17 million people out of poverty, but alternatively it could lead to 1.3 million job losses. In 2019, the House approved a plan to gradually lift the federal minimum wage to $15 per hour by 2025, but the Senate dismissed that legislation. President-elect Joe Biden has stated that he would like to raise the minimum wage to $15 per hour; however, the federal government does not currently have any plans for a potential increase.

It is very possible that legislation will be enacted to create a national $15 minimum wage, although this will most likely not affect employers in Nassau/Suffolk and the surrounding areas. Nonetheless, employers should review their wage and hour practices annually to ensure that their employees are properly classified as exempt or non-exempt and that current minimum wage and overtime rates are being paid to qualified workers. Take advantage of the new year to give your practices a fresh look.

If you have questions about minimum wage, overtime, or wage and hour exemptions, please contact us here or call (631) 738-9100.

By Christine Malafi

Updated guidance was issued by New York State on January 20, 2021. Learn more here.

On April 3, 2020, during the peak of the COVID-19 pandemic, New York State enacted mandatory paid sick leave for full-time and part-time employees as part of the state’s 2020-2021 budget.[1] The new leave provisions, which amend the New York Labor Law,[2] take effect on September 30, 2020. Touted as “the strongest Paid Sick Leave in the nation,” the law provides for varying amounts of sick leave based on employer size and revenue,[3] with the employee being restored to the same position, with the same pay and conditions of employment upon return to work.

All New York employers should review the provisions summarized below and revise their current leave policies accordingly.

How much paid sick leave is required?

The amount of paid sick leave (at an employee’s regular rate of pay) is dependent upon the employer’s size within a calendar year (January 1 to December 31) and net income in the prior tax year.

• Businesses with four or fewer employees in any year must provide each employee with at least 40 hours of paid sick leave per year, unless their net income is $1 million or less in the previous tax year, in which case such leave time may be unpaid.
• Businesses with between five and 99 employees in any year must provide up to 40 hours of paid sick leave per year.
• Businesses with 100 or more employees in any year must provide up to 56 hours of paid sick leave per year.

Employees must accrue paid sick leave at a rate of one hour for every 30 hours worked, beginning September 30, 2020, or upon the first day of employment. However, employee use of the required sick leave may be restricted for use until January 1, 2021. Alternatively, employers can opt to frontload the required time at the beginning of the calendar year.

Will unused accrued time carry over?

Any unused accrual amount must carry over to the following year; however, employers can limit the carry over to a maximum of 40 hours (if the employer has 100 or fewer employees) or 56 hours (if the employer has more than 100 employees).[4]

Unused sick time need not be paid out upon termination or separation of employment.

When can paid sick leave be used?

Sick leave may be used in partial days, but employers are permitted to set a minimum number of hours to be used at a time of not more than four hours. Covered reasons for taking sick leave under the requirement include:

• Care, treatment, preventative care,[5] or diagnosis of mental or physical illness of the employee or the employee’s family member, regardless of whether the condition has been diagnosed or requires medical care; and
• Needs related to the employee or employee’s family member concerning domestic violence, stalking, human trafficking, sexual offenses, shelters and service programs, safety planning, relocating, participating in legal proceedings or meeting with an attorney, social services provider, law enforcement, enrolling children in school, or taking other safety precautions for themselves or their family members.[6]

A “family member” includes an employee’s child or legal dependent, spouse, domestic partner, parent including legal guardian, sibling, grandchild, grandparent, and the child or parent of an employee’s spouse or domestic partner.

Employers are restricted in what information they can request from an employee requesting sick leave,and cannot request anything of a confidential nature from the employee.[7]

Correlation to Existing Policies

Employers may provide more generous sick leave policies if they wish, but those policies must be uniformly applied and should be maintained in writing.

Businesses with sick leave policies that comply with current New York City and/or Westchester County requirements may not need to make changes, but it would be wise to have your current sick leave policies and other leave policies reviewed to make sure you are in compliance with the new legal requirements in New York.

As the effective date approaches, we highly advise all New York employers to review their employee handbooks, PTO policies, and internal procedures to make sure there is no conflict between existing policies and the new legal requirements. Please contact our Labor and Employment Department at (631) 738-9100 if you need a policy revision, overhaul, or guidance on implementation for your business.

[1] All private-sector workers in New York State are now covered under NYSPSL, regardless of industry, occupation, part-time status, overtime exempt status, and seasonal status. Nonprofit employees must also comply with the law. Out-of-state employers must provide NYSPSL to employees who physically work in New York State.

[2] N.Y. Labor Law §196-b.

[3] Under NYSPSL, the amount of sick leave a covered employer must provide is determined by an employer’s size and net income in a given calendar year.

[4] Employers may set a calendar year to mean any 12-month period regarding use and accrual of leave.

[5] Because sick leave can be used for preventive medical care, it would cover absences for routine medical appointments, such as dentist and eye doctor appointments, and it may cover absences due to temporary closure of the employer’s place of business due to a public health emergency.

[6] The need for bereavement leave is not a valid reason under NYSPSL.

[7] Employers cannot require employees to work from home or telecommute instead of taking sick leave. However, an employer can offer employees the option of working from home or telecommuting as an alternative to using NYSPSL. If employees voluntarily agree to work from home or telecommute, they will retain any paid or unpaid sick leave they have accrued.

Note: this article was originally published in March 2020. It has been updated as of November 16, 2020.

The New York State Worker Adjustment and Retraining (WARN) Act requires covered businesses to provide early warnings of closures and layoffs to workers, employee representatives, the Department of Labor, and others. Unfortunately, as the coronavirus pandemic wreaks havoc on the economy, some businesses will be forced to close. Note that the WARN Act’s requirement to provide 90 days advance notice has not been waived, because the WARN Act already recognizes that businesses cannot always predict sudden circumstances. Learn more below about what businesses are covered, the steps you must take, and the information to file. Please reach out to us for guidance – we are here for you.

THE DETAILS

The WARN Act is administered by the U.S. Department of Labor Employment and Training Administration on the federal level and by the New York State Department of Labor on the state level.  Whether you are a longtime business owner or purchasing a new business, you must familiarize yourself with the complex requirements of the WARN Act.

On the federal level, a WARN notice is required when a business with more than 100 full-time workers is laying off at least 50 people at a “single site of employment.”  New York is one of a handful of states (New Jersey, California, Illinois, Wisconsin, and Tennessee) to establish more stringent WARN laws at the state level.

The New York WARN Act applies to private businesses (for-profit or not-for-profit) with 50 or more full-time employees within New York State.  WARN requires businesses to give advance written notice to all its employees as well as certain government agencies prior to particular layoffs, downsizing, or reductions in force.  It covers:

• A “mass layoff” occurs when, over a 30-day period, a reduction-in-force results in an “employment loss” of more than six months for: (a) at least 25 full-time employees who represent at least 33% of all of employees at the work site; or (b) at least 250 full-time employees.
• A “plant closing” is defined as an “employment loss” of 25 or more full-time employees during a 30-day period due to a permanent or temporary shutdown of the worksite.
• Under WARN, a “relocation” occurs when “all or substantially all” operations are relocated to a location at least 50 miles from the current location and where 25 or more full-time employees suffer an “employment loss.”

Previously, under the WARN Act in New York, the government agencies required to be notified were the New York State Department of Labor and the relevant local Workforce Investment Board. But in an amendment signed by Governor Cuomo that went into effect on November 11, 2020 (Assembly Bill 10674-A), employers must now also provide advance notice to:

• The chief elected official of the unit of local government in which the mass layoff, relocation, or employment loss will occur;
• The chief elected official of the school district in which the mass layoff, relocation, or employment loss will occur; and
• Each locality that provides emergency services to the site of employment where the employment loss will occur.

The New York WARN requirements are complex.  To complicate matters further, employment losses are aggregated over a rolling 90-day period.  So, employers not only have to look at whether employment losses taking place at a particular point in time meet the thresholds above, but they must also be mindful of employment losses in the recent past and anticipated employment losses in the near future when determining whether notice is required.  Also, certain workers, such as part-time employees working fewer than 20 hours per week or employees that have worked less than six months in the past year, are not counted when calculating the number of employees for WARN.

Employers should be mindful of WARN when buying or selling a business.  In M&A transactions, the seller is responsible for providing WARN notice for employment losses up to and including the effective date of the sale.  The buyer is responsible for providing WARN notice for employment losses post-closing.  On the closing date, employees of the seller automatically become employees of the buyer for purposes of the WARN notice requirement.  Because of this, post-closing WARN liability is commonly negotiated between buyers and sellers.  The parties are best served to work together when it comes to transitioning employees or letting them go.

Businesses that do not comply with WARN’s requirements may be required to pay back wages and benefits to workers as well as a civil penalty to the Department of Labor.  Each scenario is different and employers should consult with experienced legal counsel before making employment decisions.