The threat of significant funding cuts occurring early next year through process known as sequestration doesn’t require federal contractors to issue WARN Act notices to employees of potential layoffs, according to guidance the Department of Labor issued this week. While contractors are typically required to notify workers of potential layoffs 60 days before they could occur, the uncertainties surrounding the sequestration process—including whether funding cuts will even occur—mean that such notices are not necessary in the weeks before sequestration is scheduled to go into effect on Jan. 2, according to DOL. “Although it is currently known that sequestration may occur, it is also known that efforts are being made to avoid sequestration. Thus, the even the occurrence of sequestration is not necessarily foreseeable,” the DOL guidance says. “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 most importantly, Federal agencies also have some discretion in how to implement the required reductions if sequestration were to occur.”
The DOL guidance goes on to state, “Given that federal agencies … have not announced which contracts will be affected by sequestration were it to occur, and that many contracts may be completely unaffected, the actual contract termination or cutbacks that will occur in the event of sequestration are unknown. Thus, in the absence of any additional information, potential plant closings or layoffs resulting from such contract terminations or cutbacks are speculative and unforeseeable.” The full DOL guidance can be found here.
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