The Obama administration is asking companies affected by the military sequestration cuts to hold off issuing layoff notices as required by law.
Under the requirements of the WARN Act, private-sector employers with 100 or more full-time employees are expected to give workers at least 60 days notice of layoffs. Without warnings, employees can sue. That 60-day limit will hit many companies right before the November election.
The sequestration cuts to the military budget could push unemployment back above 9 percent. The Office of Management and Budget told contractors that if they do not issue the layoff warnings, then contractors will be compensated for legal costs if layoffs occur due to sequestration. The legal fees will be covered regardless of the outcome of the litigation, the White House memo said. Lockheed Martin and the U.S. arm of Britain's BAE Systems announced they would not issue WARN Act notices after the White House released its additional guidance.
This delay in warning notices to employees because of political reasons is unfair to the workers not to mention the cost to the taxpayers Senators. Chuck Grassley, R-Iowa and Kelly Ayotte, R-NH, sent a letter requesting more information from the White House about the new guidance, saying it could cost taxpayers billions.
"What the administration has done raises serious questions," Grassley said. "In our letter of inquiry, we're asking what authority the administration is using to say it is okay to disregard the law and commit to pay for monetary judgments and other expenses resulting from lawsuits. If workers aren't given the notice they're due, the cost could amount to billions of dollars for taxpayers. The public deserves answers and accountability without delay."