The Journal Register (Medina, NY)

Opinion

September 27, 2011

CONFER: A warning about the WARN Act

MIDDLEPORT —  

Entrepreneurship has always had its basis in the understanding and handling of the unknown. No business owner has ever known exactly what his customers want, what the markets hold, or what his competitors are doing. But, they’ve always had a good idea about what might happen and, from the theoretical standpoint, what should happen.

Things are quite different today. Since the dawn of the Great Recession in 2007 and through the economic malaise that followed, the unknown has become, well, even more unknown. Entrepreneurs now, more than ever, are unsure of what the future holds for them due to the tenuous conditions of the financial and housing industries; stubbornly high unemployment and low consumer confidence that have robbed them of old and new customers; uncertainty associated with the fiscal vitality of governments from the EU to the U.S.; and the lingering financial instability of countless firms, both large and small.

The simple yet profound question of strategic planning — “What will tomorrow bring?” — goes increasingly unanswered because no one knows anymore. Find a businessman who, in this economy, is confident about where his company will be one year — let alone three months — from now, and you can count yourself as having encountered a prophet.

That uncertainty, from even the best and brightest, is what makes New York’s Worker Adjustment and Retraining Notification Act so dangerous to the economic viability of any business already struggling to survive. WARN requires an employer of 50 or more workers to give them 90-day notice of a closing or mass layoff if it affects 33 percent of the workforce or 25 or more employees. Failure to do so requires the company to pay the affected workers 60 days of back pay and benefits. The business is also required to pay a penalty of $500 per day of violation to the state (at 90 days, that’s $45,000).

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