US Budget Cuts – Uncertainty May Relieve Companies Of Layoff Notice Requirement

Companies may not have to send employees a warning of potential layoffs because of possible across-the-board budget cuts next January, according to the U.S. Department of Labor.

Under the Worker Adjustment and Retraining Notification (WARN) Act, companies with more than 100 employees are required to send out notices at least 60 days before potential layoffs or plant closings.

Given the potential for a $1 trillion government-wide “sequestration” cut, Lockheed Martin and other defense companies have been preparing to issue WARN Act notices, and they would be due to arrive in thousands of mailboxes just days before the November elections.

But a July 30 advisory from Jane Oates, assistant secretary of employment and training administration, to state workforce agencies casts doubt on whether the pink slips will have to be issued.

“WARN Act notice to employees of Federal contractors, including in the defense industry, is not required 60 days in advance of January 2, 2013, and would be inappropriate, given the lack of certainty about how the budget cuts will be implemented and the possibility that the sequester will be avoided before January.”

But that interpretation hinges on uncertainty. Even though sequestration may occur, the government is trying to avoid it, and “perhaps more importantly, federal agencies may have some discretion in how to implement the required reductions,” Oates says…

via Uncertainty May Relieve Companies Of Layoff Notice Requirement.