Maryland’s Mini-WARN Act: Will You Be In Compliance?

Andrea Murphy
Andrea Murphy
09/10/2020

Earlier this week, I blogged about several employment laws scheduled to take effect October 1.  Among them is HB1018/SB0780, which significantly changes the State’s Economic Stabilization Act, Maryland’s version of the federal Worker Adjustment and Retraining Notification (WARN) Act. 

For readers who are unfamiliar with the Economic Stabilization Act (the Act), it applies to businesses employing 50 or more individuals and doing business in Maryland for at least one year.  It covers reductions in operations that are (1) relocations of part of an operation from one workplace to another existing or proposed site or (2) workplace shutdowns, or the shutting down of a portion of operations at a workplace, that reduce the number of employees by either 25 percent (or more) or 15 employees, whichever is greater, over a three-month period.  The Act does not govern certain other reductions in operations, including those resulting from labor disputes, at construction sites, or at temporary workplaces; those occurring in State-operated enterprises; those that are customary and due to seasonal factors; and when employers file for bankruptcy.

The Act previously established a quick response program designed to aid employers and employees in lessening the impact of covered reductions in operations.  It directed the Secretary of Labor and the Workforce Development Board to issue voluntary guidelines for employers to follow when reducing operations, such as the amount of notice to give and the appropriate continuation of benefits.  It suggested employers provide 90 days’ notice before a reduction in operations when possible and appropriate.

By contrast, this year’s revisions present major changes on the horizon.  First, the revisions require covered employers to provide 60 days’ notice in writing prior to a reduction in operations to employees and other individuals at the affected workplace, to unions and other representatives, to an applicable Dislocated Worker Unit, and to certain elected officials. Notice must contain certain information, including the name and address of the affected workplace, contact information of a supervisor there, and a statement as to when the reduction in operations is expected to occur and whether it is expected to be permanent or not.  The revised Act also clarifies that an “employer” is a business with 50 or more employees and adds that an “employee” is someone who works for salary or hourly wages or in a managerial and supervisory capacity.  And, it provides for civil penalties against employers of up to $10,000 per day for each day employers are in violation. 

In the meantime, the Maryland Department of Labor (DOL) has announced that it is working on developing regulations to help implement the Act and anticipates they will be out for public comment in November 2020.  The DOL stated that it expects the Act to be fully implemented by April 2021 and will not enforce full implementation of the Act until regulations are available. 

If you are interested in tracking these regulations, you can visit the Maryland Register Online.   

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