Layoff notices unneeded before end-of-year budget cuts: Labor Department

Reuters News
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Posted: Jul 30, 2012 8:01 PM
Layoff notices unneeded before end-of-year budget cuts: Labor Department

By David Alexander

Washington (Reuters) - The Obama administration told defense contractors on Monday they would not have to issue notices just before the November presidential election warning workers of potential layoffs due to looming budget cuts.

The Labor Department advisory said the circumstances surrounding the planned cuts were too uncertain to require defense and other federal contractors to comply with provisions of a law requiring employees to be notified 60 days before major layoffs or plant closures.

Under current law, the U.S. Defense Department is facing across-the-board budget cuts beginning January 2 aimed at cutting $500 billion in projected national security spending over the next decade.

Under the Worker Adjustment and Retraining and Notification ACT, companies have to send out notices 60 days ahead of time advising their employees of impending mass layoffs or plant closures.

If notices were sent out ahead of the impending budget cuts, the workers would be receiving them just before the November 6 presidential election.

Apart from the January reductions, the Pentagon is working to trim spending by $487 billion as ordered by the Budget Control Act last year.

Lawmakers from both parties say they oppose the across-the-board cuts that will hit in January under a process known as sequestration, but they have not been able to agree on alternative ways to reduce spending.

Representative Gerry Connolly, a Democrat from Virginia, said on Monday Congress should cancel its annual August recess to focus instead on stopping the $500 billion in automatic spending cuts.

Congress has only 11 more legislative days, he said, to broker a deal halting the cuts before the November election. If the two parties are unable to agree on a deal before the end of the term, the issue may be taken up in a post-election "lame-duck" session of Congress.

"We got to stay in session and solve this problem," Connolly told reporters after speaking at a rally to protest sequestration. "It is not rocket science."

CALL FOR COMPROMISE

The rally, held by Northrop Grumman Corp, brought together defense industry leaders and members of the Virginia Congressional delegation, as well as Virginia Governor Bob McDonnell, who urged Congress and the White House to find a solution to stop the expansive budget cuts, citing the more than 200,000 Virginia jobs at risk if a deal is not reached.

More than 2.14 million jobs nationally could be lost because of sequestration, a George Mason University analysis for the Aerospace Industries Association said.

McDonnell, a Republican, called for a compromise between Republicans and Democrats in Congress, saying a practical solution that includes cuts and revenue increases must be agreed on.

"We know we got to get our fiscal house in order, but it's got to be in a way that is systematic, that is practical, that looks out for the American war fighter and the men and women of the private sector that support them," McDonnell said. "That's not the way this was done."

The Labor Department decision drew swift condemnation from Republican Representative Buck McKeon, head of the Armed Services committee, who called it "politically motivated."

McKeon said instead of trying to find a way to avert the cuts, "the president is focused on preventing advance notice to American workers that their jobs are at risk and on perpetuating uncertainty."

"People will still get laid off because of the president's irresponsibility, but they won't have the notice to protect themselves and their families," McKeon said. "The president is doing nothing to look out for the American worker and is using our troops as leverage to push his failed political agenda."

The Labor Department said that the law did not apply in the current circumstances because while sequestration may occur, efforts are being made to avoid it.

So "even the occurrence of sequestration is not necessarily foreseeable," the guidance said. It said relevant case law would not require employers to provide notices under the current conditions.

(Additional reporting by Lauren French; editing by Mohammad Zargham)