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Walberg Statement: Hearing on "Sequestration: Examining Employers' WARN Act Responsibilities"
As prepared for delivery.

As part of the Budget Control Act of 2011, President Obama insisted on a process known as sequestration, a series of across the board spending cuts that will impact most defense and domestic programs. Sequestration is not how Washington should conduct the people’s business. It has created even more uncertainty in an already difficult environment.

Twice House Republicans have taken action to replace sequestration with commonsense cuts and reforms. Unfortunately, the president has failed to offer his own proposal that will help control runaway spending and get this economy moving again. With our nation fast approaching $17 trillion in debt and more than 12 million Americans searching for work, the time for leadership is now.

As we eagerly await the president’s plan, we have a responsibility to examine the impact of sequestration on policies within our jurisdiction. The committee’s continued oversight of the Worker Adjustment and Retraining Notification (WARN) Act is part of that effort.

Congress approved the WARN Act to help workers plan for possible job losses, as well as allow them time to access various employment services provided by the states and federal government. The law requires employers with more than 100 employees to give workers 60 days’ notice of mass layoffs or plant closings. A legal notice must include specific details, including the expected date of the first layoffs and the job titles that will be affected.

The law also includes provisions for conditional notices, as well as exceptional circumstances when an employer would not be required to issue a 60-day notice. Employers who fail to provide proper notices can be sued in federal court, liable for back wages and benefits, and be forced to pay monetary penalties.

Numerous federal contractors have advised Congress that sequestration may lead to layoffs in their workplaces. As job losses become more eminent, employers have legal responsibilities they must follow. While there are long-standing concerns with the act, it is the law of the land. Political shenanigans should not interfere with an employer’s obligation to follow the law or the Labor Department’s role in administering the law.

However, last summer the Obama administration managed to inject even more uncertainty into sequestration. On July 30, the department released guidance that states the WARN Act does not apply to sequestration and instructed employers not to issue notices. The department’s guidance raises a number of concerns.

First, the guidance contradicts current regulations that encourage employers to provide as much notice as possible, even when they are uncertain which jobs will be cut and when. And while the law creates an exemption for unexpected circumstances, to be legally protected employers must still issue notices as soon as layoffs are reasonably foreseeable.

Additionally, the department has no enforcement authority over the WARN Act. Federal judges are responsible for enforcing the law and they ultimately decide through costly litigation whether an employer complied with the law.

Finally, the guidance creates the impression that employers who follow the administration’s opinion will be immune from future litigation. Nothing could be further from the truth. If a worker feels they’ve been denied proper notice, they have every right to take their employer to court.

Perhaps this explains why the Office of Management and Budget explicitly promised to use taxpayer dollars to cover the legal expenses an employer might face for failing to warn workers of future layoffs. That’s right: the Obama administration is telling employers to ignore the law and forcing taxpayers to pick up the tab.

Assistant Secretary Oates, these are important concerns that require a serious response. I am disappointed the administration has refused to cooperate in good faith with this committee’s oversight investigation into this matter. Providing over 400 pages of materials that were slipped under a door in the middle of the night before a congressional hearing – when those materials were first requested six months ago – is an insult to this committee. Congress deserves better. America’s workers, employers, and taxpayers deserve better. It is time we got answers to the questions we’ve been asking. 

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