I’ve written a few posts about the sequestration cuts which are sizable cuts in the Defense Department’s budget that will lead to hundreds of thousands of job losses. A controversy arose when by law the companies have to alert employees to the cuts but the Obama Administration wants to hide this fact from the public. This is part of their double-game I alluded to in the piece this morning where Obama mouths the words he’s against the budget cuts (and job losses) but does absolutely nothing to stop either. The Hill picks up on the latest efforts to silence the Defense contractors who by law are supposed to inform employees of the looming job cuts. The Obama Labor Department is offering bribes to the contractors to violate the law:
The Obama administration issued new guidance intended for defense contractors Friday afternoon, reiterating the administration’s position that the companies should not be issuing layoff notices over sequestration. The Labor Department issued guidance in July saying it would be “inappropriate” for contractors to issue notices of potential layoffs tied to sequestration cuts. But a few contractors, most notably Lockheed Martin, said they still were considering whether to issue the notices — which would be sent out just days before the November election.
But the Friday guidance from the Office of Management and Budget raised the stakes in the dispute, telling contractors that they would be compensated for legal costs if layoffs occur due to contract cancellations under sequestration — but only if the contractors follow the Labor guidance. The guidance said that if plant closings or mass layoffs occur under sequestration, then “employee compensation costs for [Worker Adjustment and Retraining Notification] WARN act liability as determined by a court” would be paid for covered by the contracting federal agency.
Senate Republicans, who accused the White House of trying to hide job losses after the first guidance, said Friday that the new OMB statement “puts politics ahead of American workers.” “The Obama Administration is cynically trying to skirt the WARN Act to keep the American people in the dark about this looming national security and fiscal crisis,” Sens. John McCain (R-Ariz.), Lindsey Graham (R-S.C.) and Kelly Ayotte (R-N.H.) said in a statement. “The president should insist that companies act in accordance with the clearly stated law and move forward with the layoff notices.”The fight over WARN Act notices began in June when Lockheed Martin CEO Bob Stevens said his company might send the notices to all 123,000 of its employees.
But the new guidance would appear to address one of the chief concerns from the companies — that they could be liable to compensate employees who were laid off if the companies don’t issue the notices. The GOP senators complained, however, that this tactic would push the cost of the layoffs onto taxpayers.
For a refresher, here is the relevant part of the WARN Act:
What Triggers Notice
Plant Closing: A covered employer must give notice if an employment site (or one or more facilities or operating units within an employment site) will be shut down, and the shutdown will result in an employment loss (as defined later) for 50 or more employees during any 30-day period. This does not count employees who have worked less than 6 months in the last 12 months or employees who work an average of less than 20 hours a week for that employer. These latter groups, however, are entitled to notice (discussed later).
Mass Layoff: A covered employer must give notice if there is to be a mass layoff which does not result from a plant closing, but which will result in an employment loss at the employment site during any 30-day period for 500 or more employees, or for 50-499 employees if they make up at least 33% of the employer’s active workforce. Again, this does not count employees who have worked less than 6 months in the last 12 months or employees who work an average of less than 20 hours a week for that employer. These latter groups, however, are entitled to notice (discussed later).