February 5th, 2009
WorkforceManagement.com reported yesterday that a new law is now in effect in New York that requires many employers to give more notice to employees to be laid off, than previously required.
Currently, under the Federal government’s WARN statute, “most employers with 100 or more employees [are required to] to provide notification 60 calendar days in advance of plant closings and mass layoffs.”
In a move likely to make employers more hesitant to hire new employees, New York has enacted the stricter ”Worker Adjustment and Retraining Notification Act” as of this past Sunday, February 1st. “The New York law applies to businesses with 50 or more full-time workers… when at least 25 employees lose their positions, if they make up one-third of the workforce, or when a company lays off at least 250 full-time employees.”
According to Workforce Management, “[t]he Business Council of New York State says some 13,000 small businesses that weren’t affected by the federal statute will now be covered by the state law.”
I understand that there are good intentions behind this law. As someone who was once laid off with three hours notice, and a family to support, I definitely understand the workers’ and unions’ position on this. But I think that it will have an overall undesirable effect on workers and employees.
In countries with stringent requirements like France, laws like these create a pressure on employers not to hire new employees. The more a society chips away at the concept of at-will employment, the more hesitant companies, large and small, become in hiring new employees, because they know how difficult it will be to fire them if the need arises. Thus, France’s unemployment rate is worse than the United States’.
It will be interesting to see what affect the new law has.