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Navigating Wage And Hour Issues During Layoffs And Furloughs

An employee leaving a building with a box of personal effects.

New York is generally known to have strict wage and hour laws, more so than many other states in the United States. This means that meeting federal requirements for issues like layoffs and furloughs may not be enough to satisfy the relevant authorities. Policies like the WARN Act and various New York state laws may impact how employers provide notice to their employees of layoffs or other workplace changes.

While workers in New York have many rights, this does not necessarily mean that they are entitled to work for a given company or maintain a position. However, it does mean that employees are entitled to a certain amount of advance notice on certain workplace changes such as layoffs or furloughs.

For more information about compliance standards for wage and hour laws in New York, consider speaking with a skilled employer defense and business litigation attorney from Schwab & Gasparini. Schedule a consultation today by calling the relevant office at (315) 422-1333 in Syracuse, (518) 591-4664 in Albany, (914) 304-4353 in White Plains, or (914) 304-4353 in Hudson Valley.

Difference Between Layoffs and Furloughs

Furloughs and layoffs are often misunderstood or conflated with one another, but in the legal sphere, they have distinct meanings and different effects on the employee in question. While they may be similar, layoffs end the employer-employee relationship while furloughs retain the employee on payroll, despite putting the individual on mandatory leave. Additionally, layoffs are distinct from the termination of an employee, as layoffs have no connection to an employee’s performance as a worker.

Furloughs are generally designed to allow the employee to return to work after leave, suspending their employment for a time, but maintaining the employee on the payroll. Layoffs, which generally come in large waves due to changing business climates, release the employee to their own devices without the intention of retaining them.

WARN Act Regulations and New York State Law

However, layoffs and furloughs can be detrimental to employees who are counting on income from their employers for any number of reasons. Being laid off or put on furlough without any warning could cause serious financial harm to workers and could threaten their well-being. Therefore, the federal and state governments have created programs and legal guidelines to protect the rights of these workers.

The federal government has created the WARN Act as specified under 20 CFR Part 639, which requires employers to provide advance notice to employees a certain number of days in advance for layoffs of a certain size. To comply with federal wage and hour guidelines, employers must provide at least sixty days’ notice when laying off at least 50 employees or at least 33% of the hired workforce, excluding part-time employees.

However, New York has its own, stricter version of the WARN Act that employers must be aware of and comply with. According to the New York State Department of Labor, private businesses with 50 or more employees must provide at least 90 days of advance notice if mass layoffs affect at least 25 employees or at least 33% of all employees at the site. Understanding the differences between New York’s state laws and the federal WARN Act could help employers avoid wage and hour violations.

For more information on wage and hour laws and their effect on layoffs and furloughs, consider speaking with an experienced employer defense lawyer from Schwab & Gasparini.

Layoffs Affected by the WARN Act and New York Law

Due to the nuanced differences between the federal WARN Act and New York’s state laws, understanding what layoffs are affected and what notice is required may be helpful for employers. Ensuring proper notice is given may protect employers from lawsuits and other legal action in case of a wage and hour violation.

Federal WARN Act

The federal WARN Act only applies to plant closings and mass layoffs, which means that only larger layoffs and closures of a single worksite require the advanced notice covered by WARN. Plant closures are defined as the shutdown of one geographical location of an employer’s operations, resulting in job loss for at least 50 individuals. A mass layoff is defined as any layoff of 50 or more persons when that number is at least 33% of full-time employees or 500 or more full-time employees regardless of percentage.

New York Law

However, New York employs a stricter policy that employers may benefit from accounting for. These mini-WARN laws apply to mass layoffs of 25 or more employees representing 33% of the company’s employees, or 250 full-time employees regardless of percentage. They also cover plant closures that result in job loss for at least 25 people, whether or not the closure is temporary or permanent. Relocation of operations up to 50 miles away from the current location also requires advance notice.

What Notice Is Required?

Under the federal WARN Act, employees are required to receive 60 days’ notice for any of the above layoffs or furloughs. This notice must include information about the planned layoffs, including specific dates and expectations, when they may receive a termination letter, and whether or not they will have bumping rights. Employers are also expected to inform employees if the changes are expected to be temporary furloughs or permanent layoffs.

Shorter notice is sometimes acceptable in the event of certain exceptions. If unforeseen or unforeseeable business circumstances lead to the need for closure or layoffs, the business may be allowed to provide shorter notice. Employers may also be allowed to provide shorter notice if their company is struggling financially and no longer able to support their employees, provided they can prove that they were actively pursuing monies that would have prevented the closure. Natural disasters may also allow for a shorter notice window.

Contact a New York Employer Defense Attorney Today

For business owners or operators, understanding New York’s strict wage and hour guidelines can be challenging. Additionally, being caught unaware when it comes to layoffs and furloughs could lead to unhappy employees and legal trouble. However, engaging with these laws on both the federal and state levels may help prevent these roadblocks and work for smooth transitions. A skilled New York employer defense and business litigation attorney from Schwab & Gasparini may be able to assist employers with understanding which statutes apply to their business. For more information, consider scheduling a consultation by calling the relevant office at (315) 422-1333 in Syracuse, (518) 591-4664 in Albany, (914) 304-4353 in White Plains, or (914) 304-4353 in Hudson Valley.

Mon Feb 17 2025, 12:00am