Just in the last few months, a number of restaurants here in New York and major metropolitan areas of the country have gone out of business without any notice to employees. Obviously, this can be financially devastating to those who rely on their paycheck and tips to support themselves and their families.
Restaurants and other hospitality venues may close suddenly for a number of reasons. Sometimes, they lose their liquor license or their lease. They may just not have the money to continue operating. For a small, family-owned restaurant, a death can lead to closure – at least temporarily – until the family decides what to do.
The federal government has a law designed to help protect employees from suffering from this kind of financial hardship. It’s called the Worker Adjustment and Retraining Notification (WARN) Act. It requires employers to give 60 days’ written notice to employees or (when applicable) their unions of a mass layoff or plant closing.
The New York WARN Act
Some states, including New York and New Jersey, have their own WARN Acts that offer added protections. Here are some highlights of the New York WARN Act:
- Employers with 50 or more employees must provide 90 calendar days’ notice prior to any “mass layoff, plant closing, relocation, or a covered reduction in work hours….” totaling the designated number or percentage of employees.
- Notices must also be provided to employee representatives of all affected employees, along with other entities (like local labor boards).
- Detailed information about the action must be provided, including whether it’s temporary or permanent.
There are a number of exceptions to the general protections provided via this law. For example, it includes exceptions for natural disasters and “unforeseen business circumstances.” Of course, the latter can be open to questions about whether any particular circumstances were unforeseen and out of an employer’s control.
What about striking employees?
The federal WARN Act states that it “does not affect employers’ or employees’ rights and responsibilities under the National Labor Relations Act.” It should be noted however, that if striking employees can legally be replaced, the WARN Act doesn’t apply “when the strike or lockout is equivalent to a plant closing or mass layoff.”
Those who work in the hospitality industry, especially in New York City, may be affected by everything from the economy to tourism trends to both natural and man-made disasters. It’s crucial for the unions that represent them to make sure they know their rights. When unions have sound legal guidance of their own, they can better protect those who count on them.