Given the recent economic challenges related to the current COVID-19 pandemic many employers have become familiar with their obligation to provide notice prior to layoffs under the federal WARN Act. However, effective October 1, 2020, Maryland employers must also comply with the new requirements of Maryland’s Economic Stabilization Act (SB 780) which imposes additional notice requirements on employers laying off employees and relocating operations.
Starting October 1, 2020, employers who have been in business for more than one year with 50 or more employees must provide notice at least 60 days prior to a “reduction in operations.” A “reduction in operations” is defined as (1) an employer relocating from one workplace to another proposed site and (2) shutting down a workplace or a portion of employer’s operations such that a 25% reduction in staff or 15 employees, whichever is greater, is triggered over any three month period.
The required notice must contain:
- The name and address of the workplace where the reduction in operations is expected to occur;
- The name, telephone number, and e-mail address of a supervisory employee who may be contacted for additional information about the proposed reduction in operations;
- A statement indicating whether the reduction in operations is expected to be permanent, temporary, and whether the workplace is expected to be shut down; and
- The date on which the reduction in operations is expected to commence.
The notice must be sent to:
- All employees who will be subject to the reduction in operations;
- All bargaining representatives at the workplace where the reduction in operations is contemplated;
- The Department of Labor, Licensing, and Regulation’s (“DLLR”) Dislocated Worker Unit; and
- All elected officials in the jurisdiction where the workplace subject to the reduction in operation is situated.
Employers should note that construction sites are specifically excepted from the definition of the term “workplace” and therefore reductions in operations at construction sites do not trigger the foregoing notice requirements. Similarly, notice is not required when reductions in operations are solely the result of a labor dispute, occur on construction sites or other temporary workplaces, result from seasonal factors determined by DLLR, or result from an employer’s bankruptcy filing.
Timely compliance with the foregoing notice provisions is critical. Employers failing to comply with notice provisions in Maryland’s newly adopted Economic Stabilization Act may face compliance orders issued by DLLR and fines of up to $10,000.00 per day for each day of noncompliance.