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So’s you can see the ax falling sooner

By Josh Richman
Thursday, June 25th, 2009 at 1:53 pm in economy, George Miller, Lynn Woolsey, U.S. House.

House Education and Labor Committee Chairman George Miller, D-Martinez, is an author and Workforce Protections Subcommittee Chairwoman Lynn Woolsey, D-Petaluma, is among cosponsors of a bipartisan bill introduced today to strengthen a law requiring employers to notify workers and their communities of mass layoffs or plant closings.

“Workers deserve more than just a pink slip when they lose their job because of our nation’s economic difficulties,” Miller said in a news release. “Current protections for workers being laid off are both confusing and rarely enforced. While an early warning may not save their job, a meaningful early notice will help them prepare to find a new job or upgrade their skills for new employment.”

In recent months, laid-off workers have filed lawsuits over violations of the Worker Adjustment and Retraining Notification (WARN) Act against companies such as Lehman Brothers, retailers like Sam’s Club and Goody’s, the electronics chain Tweeter, ABX Air, USA Jet Airlines, and major law firms, say Miller et al.

Congress passed the WARN Act in 1988 to give workers and communities 60 days notice to adjust to an impending plant closing or mass layoff, because evidence shows retraining and other readjustment efforts have the most success when such notice is given.

But the new bill’s sponsors say the law has been undermined by loopholes and weak enforcement. The Government Accountability Office found a few years ago that the WARN Act covers only 24 percent of all layoffs, and of those, employers only provided notice approximately one-third of the time. The WARN Act has several exceptions that employers can invoke such as unforeseen business circumstances and whether a company is trying to attract capital to avoid a shutdown. And the WARN Act is only invoked at companies with at least 100 employees that are laying off 33 percent or more of their workforce.

The GAO found employers failed to provide notice to employees in two-thirds of layoffs and closures where the WARN Act applied, yet the law requires violating employers only to pay an employee a day’s pay for every day of notice not provided and does not give the federal government authority to enforce workers’ rights.

H.R. 3042, the new FOREWARN Act, would give the U.S. Department of Labor authority to enforce the WARN Act, and would increase penalties for violation to double back pay. It also would reduce the mass layoff figure from 50 to 25; reduce the employer size from 100 to 75 employees; lower the mass layoff trigger; lengthen the notification period from 60 to 90 days; and require employers to give the Labor Department written notification including the reason for the plant closing or mass layoff, whether the employer has jobs elsewhere, and a statement of each employee’s right to wages and benefits. And the bill would expand notification recipients to include the Secretary of Labor, elected officials including the governor, members of Congress, and state representatives, and labor unions.

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  • RR, Uninvited Columnist

    The proposed legislation should be subtitled: “Hey everybody! Join a union!” This is sheer drivel. If a company goes bust, who is going to reimburse the work force in a timely manner? What’s next, will Aunt Nellie’s Gift Shop be covered by FOREWARN when the boss has to close due to senility?

  • John W

    I’m a Democrat, but I tend to agree with RR on this one. Yikes! I’ve had lots of experience with WARN. In general, companies have complied — both because of the law and because they actually want to treat the employees as fairly as possible. However, sometimes, the circumstances just don’t permit it. 90 days (instead of 60) is just not realistic. It would be extremely difficult for smaller companies if they cut the “mass layoff” figure from 50 to 25. I’m hesitant to use the “job killer” label that Republicans like to toss around. But I think it applies in this case.