On January 30, 2009, the New York State Department of Labor filed a proposed rule governing the interpretation and implementation of the New York State Worker Adjustment and Retraining Notification (NY WARN) Act. The rule took effect on February 1, 2009, the same date as its authorizing legislation.  

As discussed in a previous advisory, the act requires employers with 50 or more employees to provide at least 90 days notice before ordering a covered plant closing, relocation, mass layoff or reduction in work hours. The notice must be provided to affected employees and representatives of affected employees, the New York State Department of Labor and local workforce partners. The rule clarifies several key definitions, requirements and questions raised in conjunction with the passage of NY WARN, including:

Definition of Employer

The rule defines "employer" as "any business enterprise, whether for-profit or not-for-profit, that employs 50 or more employees within New York State, excluding part-time employees, or 50 or more employees within the state that work in aggregate at least 2,000 hours per week." As predicted, "the calculation of total weekly hours shall include overtime hours that are earned on a regular basis" (i.e., any overtime hours worked if overtime has been earned by that employee in seven or more weeks of the 12-week period prior to the date on which notice is required).  

The rule also sets forth a five-factor test for determining whether independent contractors and wholly or partially owned subsidiaries may be treated as separate employers from their contracting or parent companies.

Notice Requirements

The rule provides further guidance with respect to NY WARN's notice requirements, including how to determine whether notice is required, who must receive notice and what the notice must contain.

Determining whether notice is necessary. The rule, like the federal WARN Act regulations, advises employers to look ahead 90 days and behind 90 days to determine whether actions constituting "employment losses" will, in the aggregate for any 90 day period, reach the minimum standards to trigger the notice requirement.   

Clarification on who must receive notice. Under NY WARN, notice must be given to "affected employees." The rule clarifies the act's definition of "affected employee" to expressly include employees "who may reasonably be expected to experience an employment loss as the result of a proposed plant closing, mass layoff, relocation or covered reduction in hours by the employer."  

Notably, an employment loss due to a reduction in hours "shall not be deemed to have occurred during any week" that the employee receives unemployment insurance as a partial wage replacement pursuant to the employer's involvement in a "Shared Work" program approved by the commissioner of labor.1  Additionally, employers closing a temporary facility or conducting layoffs at the end of a temporary project will not be required to provide notice to employees who were hired with the understanding that their employment "was limited to the duration of the facility, project or undertaking."  

Substantive Requirements. Like the federal regulations, the rule requires employers to specify a date or a 14-day period in which the covered employment action will occur. The rule also sets forth requirements for providing supplemental notice in the event a covered employment action is delayed or temporarily postponed.  

Unlike the federal regulations, the rule requires employers to directly notify all affected employees (even represented employees). The notice may not be sent via e-mail and must include a statement regarding unemployment insurance, job training and re-employment services for which affected employees may be eligible.

Exceptions to Notice Requirements
The rule provides substantial clarification with respect to NY WARN's exceptions for faltering companies, unforeseeable business circumstances, natural disasters and strikes or lockouts. The rule indicates that each of these exceptions is available not only to plant closings but to mass layoffs, relocations and work-hour reductions as well.

The rule sets forth specific criteria for invoking each exception. In all cases, employers bear the burden of showing that the requirements for an exception have been met. Employers must also provide as much notice as possible and explain the reason for reducing the notice period.


The rule's enforcement provisions describe the procedure to be followed by the commissioner of labor and also provide for an administrative appeal process. The rule restates the penalties for violations of the act, including a civil penalty of $500 for each day of the violation and liability to each employee for back pay and the value of any benefits to which the employee would have been entitled.
Accordingly, all employers operating within the state of New York need to be aware of and follow these new rules when closing a location, relocating, or reducing workforces or work-hours.

1Shared Work is a voluntary program through which certain employers can reduce the hours and wages of all or a particular group of employees, rather than laying off a percentage of the work force. The program allows qualifying employees to receive partial unemployment insurance benefits to supplement their lost wages. For more information, see the New York State Department of Labor's website.