The DOL has sent a policy letter to federal contractors instructing them not to send notices warning their workforces of impending layoffs in advance of a potential budget sequester in January. The ruling came as contractors have begun expressing fears that the Worker Adjustment and Retraining Notification Act might apply in the case of the budget sequester, under which federal agencies would see their budget slashed and the Bush-era tax cuts expire.

The DOL ruling states that WARN Act notices, which generally must be sent no less than 60 days before a mass layoff or plant closing, do not apply in the case of a sequester because it remains uncertain whether the sequester will go into effect at the beginning of 2013. Under a budget deal reached last year, the sequester will go into effect if Congress is unable to agree on a long-term plan to address the federal budget deficit. Any sequester would impose severe cuts in funds for the Defense Department and civilian federal agencies.

Because Congress may act in time, the DOL said that sending WARN notices would be “inconsistent with the purpose of the WARN Act.”

“Although it is currently known that sequestration may occur,” said the DOL, “it is also known that efforts are being made to avoid sequestration. Thus, even the occurrence of sequestration is not necessarily foreseeable.”

Moreover, should the sequester go into effect, the cuts would be “sudden and dramatic.” Thus, unforeseen business circumstances would not require the contractors to send out the notices at least 60 days in advance.

Source: WKL&B Editorial Staff