I’ve written before about the potential for a “November surprise” if the sequestration threat doesn’t get resolved before the election. The automatic cuts to the defense budget are set to go into effect on January 2, 2013, and federal law under the WARN Act required employers to give workers a minimum of 60 days notice before potential mass layoffs. That means layoff warning notices could go out to hundreds of thousands of workers just days before the presidential election.
Naturally, this poses some problems for the Obama campaign. Enter the Department of Labor, which released new guidelines this week telling states that it would be “inappropriate” to give workers 60 days advance notice in this situation, and basically asking them to ignore the employee protection laws under the WARN Act:
Although it is currently known that sequestration may occur, it is also known that efforts are being made to avoid sequestration. Thus, even the occurrence of sequestration is not necessarily foreseeable. In addition, the sequester’s impact on particular accounts will depend at least in part on Fiscal Year (FY) 2013 funding that Congress has not yet enacted. Perhaps more importantly, Federal agencies also have some discretion in how to implement the required reductions if sequestration were to occur. …
For these reasons, in the context of prospective across-the-board budget cuts under the BBEDCA, as amended by the BCA, WARN Act notice to employees of Federal contractors, including in the defense industry, is not required 60 days in advance of January 2, 2013, and would be inappropriate, given the lack of certainty about how the budget cuts will be implemented and the possibility that the sequester will be avoided before January.
This is an interesting about-face from the Department of Labor. In a statement yesterday, Sen. John McCain noted that the DOL previously argued that it has “no administrative or enforcement responsibility under [the WARN Act]” and “cannot provide specific advice or guidance with respect to individual situations.” Funny how a looming election crisis for the Obama campaign can change all that.
As McCain wrote in his statement, this advisory is a direct affront to American workers:
“At a time when our economy continues to suffer from staggeringly high unemployment, the Obama administration today took away an important planning tool for Americans who may lose their jobs as a result of the failure of Congress and the White House to address the looming and entirely predictable threat of budget sequestration. Sequestration is currently the law of the land, and our nation’s workers have a right to know how these sequestration cuts which begin in January may impact them.”
It would also make it less likely that sequestration will be dealt with before November, as there would be less urgency if the administration didn’t have to worry about mass layoff notices impacting Obama’s election chances.