After looking into last week’s mass layoff at a manufacturing plant in Scarborough, the Maine Department of Labor has determined that because Whitcraft Group owned the facility for less than three years, the company is not required to follow state labor law regarding severance pay.
The Portland Press Herald reports that the statute regarding severance pay due to a closing, substantial shutdown or relocation of a facility that has employed 100 or more workers at any time in the previous 12 months normally calls for 90-day advance notice to affected workers and a week’s severance pay for every year of service.
“We’ve concluded our investigation and determined that based on that section of the statute and our rules the Department will not hold the company liable for severance,” read a statement the department released Wednesday. “However, employees do have a right to pursue a private suit challenging a company’s assertion that it is not liable.”
Much of Whitcraft’s workforce had been on a full or rotational furlough since the middle of March. On April 29, local managers called employees to inform them they would be laid off the following day, which also would be the final day of their health and dental insurance coverage. They were also told no severance would be forthcoming, the Press Herald reports.
On Tuesday, however, Whitcraft CEO Doug Folsom said that insurance coverage for all laid-off employees would continue through this week, and that they would also receive one week of severance pay.
Connecticut-based Whitcraft purchased the facility on May 2, 2019, from LAI International, which grew out of a Maryland company initially called Laser Applications Inc. LAI had been the plant owner since 2007, when it acquired Rich Technology International.
Originally formed as the Rich Tool & Die Company in 1961 in South Windham, precision manufacturing operations moved to Scarborough in 1992 and the name was changed to Rich Technology International.
Forty of the 125 Whitcraft employees are staying on to help close down the plant before the end of July, the Press Herald reports.