AUGUSTA, Maine — Gov. Paul LePage sent a letter to President Barack Obama this week expressing his disappointment with the federal government’s decision to waive, if sequestration goes into effect, a federal law requiring large employers to notify employees several weeks before a closure or significant layoffs are made.
According to Gov. LePage’s letter, the U.S. Department of Labor and Office of Management and Budget recently said employers need not comply with the federal Worker Adjustment and Retraining Notification (WARN) Act, which requires companies with 100 or more employees to notify affected workers 60 days before closures and layoffs, if sequestration goes into effect.
Sequestration is the automatic, across-the-board cuts that will go into effect Jan. 2, 2013, if Congress fails to reach an agreement on budget cuts required under the federal Budget Control Act of 2011, which allowed the country to raise the debt limit.
Gov. LePage in his letter writes that President Obama’s decision to allow companies to ignore the WARN Act is an abdication of his responsibilities under the law.
“While the timing may be inconvenient, communities and employers deserve to know about the potential mass layoffs and, even more, the law requires it,” Gov. LePage writes.
If sequestration is left to occur, large companies that work for the government, including defense contractors in Maine, would be affected.
“Jobs in many of Maine’s crucial industries, including shipbuilding and submarine repair, are on the line,” Gov. LePage wrote in his letter to the president.
Gov. LePage also cites a study from George Mason University that claims Maine could lose 4,055 jobs alone from the cuts suffered by the U.S. Department of Defense.
Maine has its own statute that extends WARN Act protections by imposing a fine of $500 on each company that does not provide 60 days’ notice of an impending layoff to employees. It also requires companies to give severance pay to each laid-off employee.
However, the federal government has said it will pay any fines and other costs incurred by not following the WARN Act, such as the fines that could be incurred under Maine’s law.
“I am deeply concerned about your assurances to contractors that the federal government will use taxpayer money to reimburse them for any fees or other costs related to not following the law,” LePage writes. “It is astounding to me that in a time of deep debt, you would spend taxpayer dollars to pay the fines of private companies rather than working with Congress on a solution to the sequestration problem.”
Julie Rabinowitz, a spokeswoman for the Maine Department of Labor, said it’s unclear whether the federal government also would cover the severance pay as required under Maine law.