Large New Hampshire companies face stiff penalties under a law taking effect with the new year if they fail to inform workers and the state before mass layoffs or plant closings.
The New Hampshire Worker Adjustment and Retraining Notification Act _ or WARN Act _ requires companies with 75 or more full-time workers to give 60 days' notice before shutting down a plant or laying off one-third or more of the work force at one time. New Hampshire becomes one of at least 17 states with similar laws.
The law is designed to prevent large companies from closing abruptly, leaving workers without pay and benefits due to them. Workers struggled to get help under the 20-year-old federal law on plant closings.
"There's no teeth to the federal WARN Act," said Labor Commissioner George Copadis.
Under the new law, New Hampshire can hold parent companies financially liable when subsidiaries fail to give workers notice. The provision applies to any entity that operates a business in New Hampshire with 75 or more full-time employees.
"We're only looking here at the extreme incidents," Copadis said of expected enforcement of the law. "There have only been a few over the past five years."
Gov. John Lynch said the new law sends a strong message to New Hampshire workers that the state cares about them.
"We have seen what the sudden closing of a business can do to workers, their families and the entire community. The impact of a sudden closure is even more severe if a company fails to provide the proper warning or compensation," Lynch said in a statement Thursday.
The most recent large closure was Precision Technology in Pembroke; it abruptly closed its doors in August. The state is still trying to win $300,000 in pay owed to about 130 workers. The state plans to hold hearings on the closure, though the new law can't be applied retroactively, Copadis said.
State business groups opposed the law, arguing it put businesses at a competitive disadvantage and contained harsher penalties than the federal law.
The federal penalty is $500 per day, while the state law contains a civil penalty of as much as $2,500 plus $100 per employee per day. The federal law also requires notice for companies with 100 or more workers.
New Hampshire has about 1,000 employers with more than 75 employees, according to the state Labor Department. The state law will cover about 280 companies with 75 or more workers not included in the federal notification requirement.
The federal law sets a 60-day notice threshold for companies with 100 or more employees but leaves it to a worker or a group of workers to band together to sue in federal court to pursue a claim, which can take years, Copadis said.
California and Illinois have similar laws that set the threshold at 75 or more employees and require 60 days' notice, according to the state Labor Department. New York sets a lower threshold of 50 employees and requires 90 days' notice. Hawaii and Wisconsin also set the threshold at 50 employees but require 60 days' notice.
Nationwide, 4 million workers lost their jobs through mass layoffs between December 2007, the start of the recession, and June 2009, according to the U.S. Department of Labor's Bureau of Labor Statistics. In November alone, more than 165,000 workers lost their jobs in 1,797 mass layoffs, the bureau reports.