Maryland: State WARN Act Mandates Advance Notice, Continued Benefits for Reduction in Force

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All Employers with MD Employees

EFFECTIVE

October 1, 2020

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With the unprecedented impact of COVID-19, some states have relaxed the provisions of their local WARN Acts.  Maryland, on the other hand, has enacted amendments mandating certain requirements even for small job actions.  Recent amendments to the Economic Stabilization Act will require employers to fulfill notice obligations and continue benefits, triggered by a closure of all or some business operations of as few as 15 employees.

The new law becomes effective October 1, 2020 and implements three critical changes:

  1. Mandatory Advance Notice. Employers must provide written notice 60 days prior to a reduction in operations to the following individuals:
    1. All employees at the workplace subject to the reduction in operations;
    2. Each representative or bargaining agency representing employees at the workplace subject to the reduction;
    3. The Division of Workforce Development’s dislocated worker unit; and
    4. All elected officials in the jurisdiction where the workplace subject to the reduction is located
  2. Continuation of Benefits. Additional regulations addressing continuation of benefits (including health insurance, pension, and severance) that employers must provide to employees who are separated from employment during the reduction is forthcoming.
  3. Orders and Fines. The state secretary of labor must issue an order compelling compliance where any violations of the new notice requirement are found, and additionally allows the secretary to assess civil penalties of up to $10,000 per day (capping at a maximum potential total of $600,000).

Unlike the federal or other state WARN acts, the Maryland legislation does not appear to contain exceptions or clarifying provisions: for example, it does not provide an exception or allow shortened notice for natural disasters, such as the COVID-19 pandemic.  Employers are recommended to carefully review the new regulations with counsel prior to making any reductions in operations.

Action Items

  1. Review the new rules here.
  2. Review business financial projections now in preparation for potential notice requirements.
  3. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2020 ManagEase

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