Department of Labor

Services to Workers Under the Worker

Adjustment and Retraining Notification
Act

Report 2022-S-11 June 2023

OFFICE OF THE NEW YORK STATE COMPTROLLER

Thomas P. DiNapoli, State Comptroller
Division of State Government Accountability
Audit Highlights

Objectives
To determine whether the Department of Labor (Department) is providing appropriate and timely
services to workers affected by closings and layoffs that are covered under the Worker Adjustment and
Retraining Notification Act (WARN Act or Act), and is effectively overseeing employer compliance with
the Act. The audit covered WARN Notices received by the Department that were dated January 2019
through April 2022. We also considered Department activities related to these Notices through January
2023.

About the Program

The Department’s mission is to provide outstanding services to its customers – the workers and
businesses in New York State. As part of fulfilling its mission, the Department, through its Division
of Employment and Workforce Solutions (DEWS), administers the State’s WARN Act and provides
related services. Enacted in 2008, the WARN Act requires covered employers to give early warning
to employees – defined as at least 90 days advance notice (Notice) – of a mass layoff, relocation, or
employment loss, with some exceptions. Employers must also notify the Department, Local Workforce
Development Boards, and certain local officials.

Covered employers are those with 50 or more full-time employees in the State or 50 or more
employees who, in aggregate, work at least 2,000 hours per week. This advance notice protects
employees – as well as their families and communities – by giving them time to transition, seek new
employment, and enter workforce training programs. Employers that fail to submit a Notice at least 90
days prior to the event and are not exempt may be liable for back pay and the value of any benefits
that laid-off employees would have been entitled to. This liability can be reduced if the employer pays
all applicable employees appropriate back pay and benefits within 3 weeks from the date the employer
orders the mass layoff, relocation, or employment loss.

Department receipt of a Notice triggers staff to offer Rapid Response services, such as job search and
résumé preparation assistance, career counseling, and occupational skills training, to assist workers
in obtaining re-employment as soon as possible. DEWS maintains the Notices and the workforce
intelligence data needed to initiate a response to mass closures or layoffs. Within DEWS, the Statewide
Rapid Response Coordinator oversees a WARN Unit and 10 Regional Rapid Response Teams
(Regional Teams) located throughout the State. The WARN Unit receives the Notices, tracks their
receipt in a database, and delegates Rapid Response activities to the appropriate Regional Teams.
The Department also works with partners, such as Local Workforce Development Boards and Career
Centers, to provide Rapid Response services to workers affected by Notices.

With many New Yorkers losing their jobs as a result of the COVID-19 pandemic, starting in March
2020, the Department shifted its work focus, including those of Rapid Response staff, to processing
Unemployment Insurance (UI) claims instead of performing their regular duties. The WARN Act’s
90-day advance notice requirement was not suspended during the pandemic. Existing provisions of the
notice requirements of the Act, however, include exceptions, such as when the need to provide Notice
was not reasonably foreseeable at the time it would have been required. The Department received
2,752 Notices that were dated during the period January 2019 through April 2022, covering a reported
280,302 affected employees. Of the 2,752 Notices, 1,887– about 69% – cited the pandemic as the
reason for the Notice.

Report 2022-S-11 1
Key Findings
We found several areas the Department could improve to better meet its obligations under the Act and
ultimately the needs of dislocated workers. Specifically, we found weaknesses in the Department’s
oversight of employer compliance with the advance notice requirements of the Act. We also
identified WARN Notices that were not entered into the Department’s One-Stop Operating System
(OSOS), the system used to record related services to employers and affected employees. Further,
Department staff were often late in attempting initial outreach to employers that submitted Notices
and to affected employees, and in some cases, there was no record of any outreach. In combination,
these weaknesses impede the Department’s success in meeting the needs of dislocated workers and
may undermine public perception of its commitment to its mission. The Department was cooperative
throughout the audit and cited the unprecedented challenges of the pandemic as a major factor in these
audit results:  

ƒ We reviewed 50 Notices, covering 19,132 affected employees, to determine whether they were
submitted timely by employers and to identify any actions Department staff took when they were
not. For five Notices covering 1,310 employees, we found the Department didn’t take adequate
action to substantiate either the validity of the exemption or the employer’s claim that it would pay
the affected employees.
ƒ Of a random sample of 184 Notices, representing 17,171 reported employees, 91 Notices,
representing 6,908 reported employees, were not entered in the system the Department uses
to record related services to employers and affected employees. Projecting these results to the
population of 2,752 Notices with a 95% confidence interval results in at least 1,164 Notices that
were received but not entered in OSOS, indicating that the number of affected employees not
offered Rapid Response services (in addition to the number of related employers) is potentially
much greater.
ƒ The Department’s attempts at outreach to both employers and the affected employees were often
late and at times did not happen at all, according to its records.
Key Recommendations
ƒ Implement a process to substantiate that employers that file late Notices meet exemption criteria
and, where applicable, to verify that they pay affected employees when they cite past or planned
payments in Notices.
ƒ Follow up on Notices that were not entered in OSOS, including those identified by our audit, and
offer and provide Rapid Response services as appropriate.
ƒ Take steps to improve timely outreach to both employers and employees affected by employment
changes covered by the WARN Act.

Report 2022-S-11 2
Office of the New York State Comptroller
Division of State Government Accountability

June 21, 2023

Roberta Reardon
Commissioner
Department of Labor
W.A. Harriman Campus, Building 12
Albany, NY 12240

Dear Commissioner Reardon:

The Office of the State Comptroller is committed to helping State agencies, public authorities, and local
government agencies manage government resources efficiently and effectively. By doing so, it provides
accountability for the tax dollars spent to support government operations. The Comptroller oversees
the fiscal affairs of State agencies, public authorities, and local government agencies, as well as their
compliance with relevant statutes and their observance of good business practices. This fiscal oversight
is accomplished, in part, through our audits, which identify opportunities for improving operations.
Audits can also identify strategies for reducing costs and strengthening controls that are intended to
safeguard assets.

Following is a report of our audit entitled Services to Workers Under the Worker Adjustment and
Retraining Notification Act. The audit was performed pursuant to the State Comptroller’s authority as
set forth in Article V, Section 1 of the State Constitution and Article II, Section 8 of the State Finance
Law.

This audit’s results and recommendations are resources for you to use in effectively managing your
operations and in meeting the expectations of taxpayers. If you have any questions about this report,
please feel free to contact us.

Respectfully submitted,

Division of State Government Accountability

Report 2022-S-11 3
Contents
Glossary of Terms 5
Background 6
Audit Findings and Recommendations 9
Employer Compliance With Advance Notice Requirements 9
Case Management System Completeness 10
Outreach to Employers 11
Outreach to Employees 12
Recommendations 14
Audit Scope, Objectives, and Methodology 15
Statutory Requirements 16
Authority 16
Reporting Requirements 16
Exhibit 17
Agency Comments 18
Contributors to Report 21

Report 2022-S-11 4
Glossary of Terms

Term Description Identifier

Department Department of Labor Auditee

Affected Employees who are affected by a mass layoff or closure Key Term
employees covered by the WARN Act
Covered Employers that must comply with the WARN Act Key Term
employers
DEWS Division of Employment and Workforce Solutions Division
Guidance The Department’s internal guidance, last updated April Key Term
14, 2021
Notice An employer’s advance notice to affected employees Key Term
and others of plant closings, layoffs, and other covered
reductions in work hours
OSOS The Department’s One-Stop Operating System System
Pandemic 3/17/20–6/20/21: the period of time when Department Time Period
Phase employees’ work focus was on UI claims
Post-Pandemic 6/21/21–4/27/22: the period of time, subsequent to the Time Period
Phase focus on UI claims, when Department employees
worked on Rapid Response services
Pre-Pandemic 1/1/19–3/16/20: the period of time when Department Time Period
Phase employees worked on Rapid Response services, prior to
the shift to focus on UI claims
Rapid Services provided to both businesses and employees Key Term
Response that are affected by cutbacks and site closings
Regional Regional Rapid Response Teams Key Term
Teams
UI Unemployment Insurance Program
WARN Act New York’s Worker Adjustment and Retraining Law
(or Act) Notification Act

Report 2022-S-11 5
Background
The Department of Labor’s (Department) mission is to provide outstanding service
to its customers – the workers and businesses in New York State. The Department
assists workers by connecting them to employment, training, and upskilling
opportunities to aid them in finding a career. It also supports businesses by helping
them find qualified workers and informing them about tools and incentives to make
their businesses thrive. Additionally, it supports the unemployed and helps ensure
safe workplaces and fair wages for workers. As part of fulfilling its mission, the
Department, through its Division of Employment and Workforce Solutions (DEWS),
administers the State’s Worker Adjustment and Retraining Notification Act (WARN
Act or Act) and provides related services.

Enacted in 2008, the WARN Act requires covered employers to give early warning to
employees – defined as at least 90 days advance notice (Notice) – of a mass layoff,
relocation, or employment loss, with some exceptions. They must also file a Notice
with the Department and with Local Workforce Development Boards and certain
local officials. Department receipt of a Notice triggers staff to offer Rapid Response
services, such as job search and résumé preparation assistance, career counseling,
and occupational skills training, to assist workers in obtaining re-employment as
soon as possible. Employers may claim an exemption to the 90-day requirement
under the following circumstances:

ƒ The employer was actively seeking capital or business that would have
prevented or postponed a relocation or termination and the employer – in good
faith – believed that giving notice would prevent the business from obtaining the
capital or business needed.
ƒ The closing is a temporary facility, or the mass layoffs are the result of the
completion of a particular project.
ƒ The layoff/closure was not reasonably foreseeable at the time the Notice would
have been required.
ƒ The plant closing or mass layoffs were due to natural disaster.
According to Department policies and procedures, if the Notice is submitted within
fewer than the required 90 days or appears not to meet one or more other WARN
provisions, staff reach out to employers to substantiate any claim for an exception,
and review information to determine if a violation may have occurred. If they find
that an exception is not substantiated, the Notice is referred to Counsel’s Office for
guidance. Employers that fail to submit a Notice at least 90 days prior to the event
and are not exempt may be liable for back pay and the value of any benefits that
laid-off employees would have been entitled to. This liability can be reduced if the
employer pays all applicable employees appropriate back pay and benefits within 3
weeks from the date the employer orders the mass layoff, relocation, or employment
loss. Furthermore, an employer may be subject to a civil penalty of up to $500 for
each day of the violation for up to 60 days. Late-filed Notices must be submitted to
the Department as soon as practicable and must provide the basis for the reduced
notification period.

Report 2022-S-11 6
Covered employers are those with 50 or more full-time employees in the State or 50
or more employees who, in aggregate, work at least 2,000 hours per week. A mass
layoff is an event that affects 25 or more full-time employees, if those employees
make up at least 33% of all the employees at the site, or that otherwise involves 250
or more full-time workers. This advance notice protects employees – as well as their
families and communities – by giving them time to transition, seek new employment,
and enter workforce training programs.

New York’s WARN Act is more stringent than the federal WARN Act, which took
effect in 1989 and requires covered employers with 100 or more employees to give
60 days advance notice. Some states’ laws differ from New York’s Act and cover a
broader class of employees. For example, unlike New York’s Act, Vermont’s covers
part-time employees. Other differences relate to conditions under which Rapid
Response services may be offered. For example, New Jersey requires employers
to provide Rapid Response teams with on-site work-time access to the affected
employees, whereas New York employers are not obligated to accept Rapid
Response services or to allow them to take place at their business location(s).

In addition to providing Rapid Response services, DEWS maintains Notices and the
workforce intelligence data needed to initiate a response to mass closures or layoffs.
Within DEWS, the Statewide Rapid Response Coordinator oversees a WARN Unit
and 10 Regional Rapid Response Teams (Regional Teams) located throughout
the State. The WARN Unit receives the Notices, tracks their receipt in a database,
and delegates Rapid Response activities to the appropriate Regional Teams. The
Department also works with partners, such as Local Workforce Development Boards
and Career Centers, to provide Rapid Response services to workers affected by
Notices. In December 2020, the Department created a Strategic Workforce Action
Team to provide additional assistance to Regional Teams as needed.

After a Notice is received, Regional Teams conduct outreach to the employer to

notify it of available services and to obtain employee contact information. Regional
Teams’ subsequent outreach to affected employees includes an orientation letting
them know about available services, followed by routine contact and/or support
in obtaining services. Regional Teams use the Department’s One-Stop Operating
System (OSOS) as a case management system to track employer information as
well as the Rapid Response activities and services they offer and/or provide on
behalf of affected employees. OSOS serves as the agency-wide system of record for
services provided to both employers and employees covered by the WARN Act (the
Department uses OSOS to maintain other service information as well).

On March 7, 2020, the Governor issued a series of Executive Orders declaring a

Statewide Disaster Emergency due to the threat of the COVID-19 pandemic. By
March 22, 2020, all businesses not defined as essential by the Executive Orders
were directed to close or operate remotely. Businesses such as bars, restaurants,
gyms, and casinos were not eligible for designation as essential businesses and
were instructed to remain closed. With many New Yorkers losing their jobs as the
pandemic emerged and continued, the Department shifted its work focus in March
2020 to processing Unemployment Insurance (UI) claims, drawing staff away from

Report 2022-S-11 7
their regular duties – including WARN-related activities – to manage the increased
demand for UI benefits. According to Department officials, staff returned to providing
WARN-related Rapid Response services in June 2021.

While the Department’s focus during the pandemic may have changed, the WARN
Act’s 90-day advance notice requirement was not suspended. Existing provisions
of the Act, however, include exceptions, such as when the need to provide Notice
was not reasonably foreseeable at the time it would have been required. As many
employers were closing their businesses or laying off workers due to the pandemic,
a gap emerged in the Department’s ability to assist workers who were affected by
closures covered by the Act. As a result, by June 2021 – when the number of UI
claims slowed enough to allow most Department staff to return to their regular job
duties – there was a significant backlog of unaddressed Notices.

Department data indicated that it received 2,752 Notices dated during the period
January 2019 through April 2022, covering a reported 280,302 affected employees.
Of the 2,752 Notices, 1,887 – about 69% – cited the pandemic as the reason for
the Notice. During the approximately 3-year period, the number of Notices ranged
from three in October 2021 to a high of 834 in March 2020 (the second highest
number of Notices was 478 in April 2020). Notices prior to and during the pandemic
covered multiple industries across the State, including entertainment, agriculture,
construction, and manufacturing. For additional information on the industries and
affected areas, click on the image below to see our interactive map.

Report 2022-S-11 8
Audit Findings and Recommendations
We found several areas the Department could improve to better meet its obligations
under the Act and ultimately the needs of dislocated workers. Specifically, we
found weaknesses in the Department’s oversight of employer compliance with the
advance notice requirements of the Act. We also identified WARN Notices that
were not entered in OSOS, the system the Department uses to record related
services to employers and affected employees. Further, Department staff were
often late in attempting initial outreach to employers that submitted Notices and to
affected employees, and in some cases, there was no record of any outreach. In
combination, these weaknesses impede the Department’s success in meeting the
needs of dislocated workers and may undermine public perception of its commitment
to its mission. The Department was cooperative throughout the audit and cited the
unprecedented challenges of the pandemic as a major factor in these audit results.

Employer Compliance With Advance Notice

Requirements
We found the Department didn’t take adequate steps to determine whether some
employers that submitted late Notices qualified for exemptions to the minimum
90-day advance notice requirement or that they paid affected employees back pay
and benefits cited in their Notice and were therefore not in violation of the Act.

We reviewed a sample of 50 Notices, covering 19,132 affected employees, to

determine if they were submitted timely by employers and to identify any actions
Department staff took when they were not. Of the 50 Notices, 25 were submitted
at least 90 days prior to the reported closure or layoff date, as required. Of the
remaining 25 Notices that were not submitted timely, 20 included a request for an
exemption to the 90-day requirement and cited pandemic-related circumstances that
didn’t require the Department to take further action to substantiate. For example,
one employer’s contract to provide busing to school districts was canceled as
schools moved to remote classes during the pandemic. In this case, the business
qualified for an exemption from the 90-day requirement because the layoff was not
foreseeable at the time the Notice would have been required.

For the remaining five Notices, the Department didn’t take adequate action to
substantiate either the validity of the exemption or the employer’s claim that it would
pay the affected employees. Results for these Notices, which covered a reported
1,310 employees, were as follows:

ƒ Two Notices, filed by the same employer for two separate locations and
covering 1,096 employees, included statements that the employer qualified
for a late filing because it was unable to attract new investors. However, the
Department did not take steps to substantiate whether the claimed exemption
was valid. In response to our observations, Department officials stated they
granted an exemption to this employer due to the pandemic, even though the
employer’s explanation did not cite the pandemic as relevant to its exemption
request.

Report 2022-S-11 9
 ƒ For one late Notice, submitted in September 2019 and covering 108
employees, the employer claimed it was unable to obtain investor backing.
Although Department officials stated that the Notice was referred to Counsel’s
Office, they did not provide evidence of this referral or the final determination
made by Department Counsel.
ƒ Two Notices, representing two employers and covering a total of 106
employees, both cited plant closures and included statements that the
employers would pay the affected employees; however, the Department didn’t
take steps to determine if the employers did so.
Without substantiating an employer’s exemption status, there is a risk that affected
employees will not only have less advance notice to prepare for job loss – which is
the primary purpose of the Act – but also may not receive pay and benefits to which
they’re entitled and may especially need during their time of job transition. This lack
of enforcement may diminish public perception of the Department’s commitment
to holding employers accountable for providing timely notice of impending job
reductions.

Department officials generally cited the circumstances of the pandemic as the reason
for not verifying exemption status. They also said that it hasn’t been their practice to
request proof of payment and that they’ve historically accepted a business’ assertion
that payment was made, and that they review the matter if and when a complaint is
filed. They also described plans that are in process to provide better assurance about
the validity of employer exemptions and claims for payment. Specifically, a new
WARN submission portal will require filers to upload information that substantiates
claims for exemption, and proof of payment will be required in situations where
late-filed Notices indicate that payments were or will be made to affected employees.

Case Management System Completeness

We found that a significant number of Notices were not entered in the Department’s
case management system used to record and track the services provided to both
employers and affected employees. This reduces the likelihood that relevant
outreach and services were offered and/or provided to them, and results in the
Department having incomplete information about effects on the State’s workforce.

The Department’s Internal Guidance (Guidance), last updated in April 2021, requires
that Regional Coordinators attempt to contact the employer that filed the Notice
within 1 business day of receipt of the Notice to gather layoff or closure event details
and to explain the services available to the employer and affected employees. The
Guidance further requires that all Notices, without exception, be entered in OSOS.
The Regional Coordinators must also enter account updates in OSOS – on a
real-time basis when possible – including the outreach conducted, Rapid Response
activities taken, and related comments.

We selected a random sample of 184 Notices of the 2,752 received to determine if

they had been entered in OSOS as required. Of the 184 Notices, 91 had not been
entered in OSOS at the time of our testing, representing 6,908 reported employees

Report 2022-S-11 10
(see Exhibit). Projecting these results to the population of 2,752 Notices with a
95% confidence interval results in at least 1,164 Notices that were received but not
entered in OSOS, indicating the number of affected employees not offered Rapid
Response services (in addition to the number of employers) is potentially much
greater.

Department officials confirmed that Notices were missing from OSOS and
acknowledged that there was still a backlog of unentered Notices from the pandemic
period as a result of the agency shifting its focus to processing UI claims. During
visits with staff from the Department’s 10 regions, we found that each region had
a different method for reducing the backlog. Further, staff at every region said
they hadn’t received any guidance or instructions from the Department regarding
addressing the backlog, despite the Department’s assertion that each Regional
Office was assigned a staff member from the Strategic Workforce Action Team to
assist them in doing so. The Department did not provide us with any support that
either written or verbal guidance to the Regional Teams occurred.

In response to our preliminary findings, staff added the missing Notices we identified
to OSOS and created business profiles for employers that were not already in
OSOS. However, there were no comments or activities entered in OSOS for any of
the 91 employers we originally identified as missing from the system, indicating the
Department had not attempted meaningful contact with either the employers or the
affected employees.

While the high number of layoffs and closures during the pandemic significantly
increased the Department’s WARN-related workload, officials also cited vacancies
throughout DEWS as a factor straining its ability to meet this need. The Statewide
Rapid Response Coordinator position, for example, remained vacant for several
months during our audit period. Additional vacancies in the Regional Offices
resulted in regions operating with a suboptimal number of WARN-focused staff. As
of August 2022, Department officials indicated that just 28 of 40 regional positions
– 70% – were filled. They said they have made efforts to backfill positions but faced
challenges recruiting staff. They also cited statewide hiring freezes, retirements, and
staffing reassignments during the pandemic as contributing factors.

Outreach to Employers
Timely outreach to employers helps Department staff obtain contact information for
employees and begin providing access to Rapid Response services as quickly as
possible. Outreach that occurs long after a Notice is filed reduces the likelihood that
staff will contact affected employees and could result in delays in their receiving job
readiness services. Other outcomes could include delays in re-employment and
employees needing UI benefits for longer than might otherwise be necessary. We
found that Department staff were often late in attempting initial outreach to employers
that submitted Notices, and in some cases, there was no record of any outreach.

The Department’s Guidance requires staff to attempt to contact the employer that
filed the Notice within 1 business day of its receipt. We reviewed activities that

Report 2022-S-11 11
staff recorded in OSOS for 50 Notices to determine whether their outreach to
employers was timely. We considered any attempted contact that took place within
5 business days of receipt of the Notice to be timely. Of the 49 employers that filed
the 50 Notices, staff initiated timely contact with 29 (30 Notices). Of the remaining
20 employers, 14 were contacted late – ranging from 6 to 428 business days after
receipt of the Notice – and six were not contacted at all. Table 1 summarizes our
results by Pre-Pandemic, Pandemic, and Post-Pandemic Phases (these Phases
align with Department descriptions of their work focus during the period under audit).
Table 1 – Outreach to Employers*

Date of Notice Pre-Pandemic Phase Pandemic Phase Post-Pandemic Phase Totals

1/1/19–3/16/20 3/17/20–6/20/21 6/21/21–4/27/22 1/1/19–4/27/22
# of # of # of # of # of # of # of # of
Notices Employees Notices Employees Notices Employees Notices Employees
Affected Affected Affected Affected
Timely
outreach to 17 3,642 6 2,679 7 1,436 30 7,757
employer
Late outreach
3 444 8 6,486 3 386 14 7,316
to employer
No outreach to
– – 6 4,059 – – 6 4,059
employer
Totals 20 4,086 20 13,224 10 1,822 50 19,132
* Pre-Pandemic: period when Department staff worked on Rapid Response services, before the pandemic forced a shift to UI claims.
Pandemic: period when Department staff’s work shifted to focus on UI claims. Post-Pandemic: period when Department staff’s focus shifted
back to Rapid Response services.

Department officials, in responding to our preliminary observations, cited the

extraordinary circumstances of the pandemic as the primary factor in gaps in
outreach. They indicated that training, enhanced reports, and monitoring tools –
such as a standardized case management tracker – have been implemented or are
planned to improve outreach.

Outreach to Employees
Outreach to both employers and employees increases the likelihood that staff will
make meaningful contact with employees and will offer services. Lack of outreach
may result in employees not finding employment, staying on UI for longer than might
otherwise be necessary, and/or not receiving other job readiness services, such as
résumé assistance. However, Department records indicated that staff either did not
make contact, were late in attempting contact, or made fewer than three attempts to
contact more than half of the affected employees in our sample.

According to the Department’s Guidance, Regional Teams are responsible for

making meaningful contact with affected employees. Department officials defined
meaningful contacts as those that include a focus on re-employment, such as
creating a résumé, practicing interview skills, reviewing job search results, and
obtaining skills classes. Although employees covered by a Notice are not required to
accept Rapid Response services, officials from all 10 Regional Teams said that their
standard practice is to reach out to an affected employee at least three times before
deeming the individual “unresponsive” and manually inactivating the employee in

Report 2022-S-11 12
OSOS. The Guidance states that as a dislocation event progresses, Regional Teams
will work with the employer to provide a Rapid Response orientation to affected
employees prior to layoff whenever possible.

After the orientation, Regional Teams are required to regularly follow up with
employees and provide ongoing services to them, which they must record in OSOS.
If there is no information entered in OSOS for 90 days for an affected employee,
the individual automatically becomes inactive in the system. Although the Guidance
doesn’t establish a time frame for contacting employees when an orientation is not
held or when the employee doesn’t attend an orientation, we considered contact
and services that were initiated within 90 days of last day worked, according to
information recorded in OSOS, as timely. Beyond that time, employees would
become inactive in OSOS, which would reduce the likelihood of them being offered
or receiving Rapid Response services, and would not appear on OSOS reports used
to monitor progress.

Of the 2,752 Notices that were dated during the period January 1, 2019 through April
27, 2022, covering a reported 280,302 reported employees, OSOS records reflected
information for just 575 Notices (21%) and for 23,521 of the 69,454 employees (34%)
reported on the 575 Notices. We reviewed activities that staff recorded in OSOS for
a sample of 100 of the 23,521 employees to determine whether contact was timely
(i.e., within 90 days of last day worked) and what steps staff took to address their
needs, such as providing assistance with job matches or information about career
fairs. Of the 100 employees, 40 were contacted timely, 57 were either not contacted
at all or not contacted timely, and for the remaining three employees, Department
outreach was discontinued prior to the three attempts considered standard
practice. (Department partners, such as its Career Centers, provided services to 10
employees.) Table 2 summarizes our results by Pre-Pandemic, Pandemic, and
Post-Pandemic Phases.
Table 2 – Outreach to Employees

Date of Notice Pre-Pandemic Pandemic Post- Pandemic Totals

Phase Phase Phase 1/1/19–4/27/22
1/1/19–3/16/20 3/17/20–6/20/21 6/21/21–4/27/22
Employees not contacted by
Regional Team (or other
2 26 3 31
partners) or not contacted
after attending orientation
Contact began > 90 days from
2 22 2 26
last day of work
Fewer than 3 outreach
1 1 1 3
attempts
Contacted timely 17 20 3 40
Totals 22 69 9 100

Report 2022-S-11 13
For the 26 affected employees whom staff did not contact within 90 days of their last
day worked, there were 13 for whom 20 or more months elapsed before staff made
initial contact. Of the 13, 12 employees’ last day worked was during the Pandemic
Phase; the other employee’s last day worked was 1 month prior. Department officials
said there were a few instances where Rapid Response staff were permitted to work
on Notices during the Pandemic Phase; however, most Notices received were not
given immediate attention, and many were not acted upon during the period we
examined. They also said that, in August 2022 (during our audit), Rapid Response
teams began using a standardized customer tracker, separate from OSOS, to
manage their caseload.

In response to our preliminary findings, Department officials said that staff were
still working to clear the backlog that accumulated during the period when Rapid
Response staff were processing UI claims. They also indicated that they have taken
steps to improve their oversight of WARN-related activities. These include holding
training about appropriate recording of services in OSOS (in July 2022, during
our audit) and implementing a standardized case management tracker (in August
2022). Other Department changes, begun during our audit, may improve its WARN
services. These changes include deployment of the WARN portal, expected to go
live in April 2023, that is part of its efforts to assist both employers and employees
affected by closures covered by the WARN Act.

Recommendations
1. Implement a process to:
ƒ Substantiate that employers that file late Notices meet exemption
criteria; and
ƒ Verify that employers pay affected employees when they cite past or
planned payments in late-filed Notices.
2. Follow up on Notices that were not entered in OSOS, including those
identified by our audit, and offer and provide Rapid Response services as
appropriate.
3. Take steps to improve timely outreach to both employers and employees
affected by employment changes covered by the WARN Act.
4. Assess current and anticipated WARN activity to determine and pursue
appropriate WARN staffing levels.

Report 2022-S-11 14
Audit Scope, Objectives, and Methodology
The objectives of our audit were to determine whether the Department is providing
appropriate and timely services to workers affected by closings and layoffs that are
covered under the WARN Act, and is effectively overseeing employer compliance
with the Act. The audit covered Notices received by the Department that were dated
January 2019 through April 2022 and Department activities related to these Notices
through January 2023.

To accomplish our objectives and assess related internal controls, we interviewed

Department officials at the DEWS Central Office and at each of the 10 Regional
Offices. We reviewed relevant State and federal laws and Department policies and
procedures. We also analyzed data from the Department’s WARN database to
understand information about the Notices in our audit scope, such as their effective
date, the number of employees reportedly affected, and the number that cited
pandemic-related causes. We determined the data was reliable for the purposes
of our testing. We selected two samples from the data: a statistical sample and a
judgmental sample. For the statistical sample, we selected a random sample of 184
of the population of 2,752 Notices that were dated during the period January 2019
through April 2022 to evaluate the Department’s WARN-related activities, including
whether the sample Notices had been entered in OSOS. The sample included
Notices from nine of the 10 Regional Offices (Southern Tier was not among the
offices represented in the sample). We designed our statistical sample to project its
results to the population. For the judgmental sample, we selected 50 Notices from
the same population – five from each of the 10 regions – based on the number of
affected employees reported per Notice. We did not design this sample to project to
the related population and we did not project its results to the related population.

Additionally, we analyzed OSOS data to determine whether the Department

contacted employers that filed Notices and provided appropriate and timely services
to affected employees. We determined the OSOS data was incomplete with respect
to WARN Notices and the related outreach to employers and employees, and we
report this among our findings. In the absence of other source data, we relied on
the information that had been entered in OSOS, in addition to discussions with
Department personnel, to support our conclusions about this outreach. To evaluate
the timing and content of attempted outreach to affected employees, we selected a
random sample of 100 of the 23,521 affected employees reported in the OSOS data.
We did not design this sample to project to the related population and did not project
its results to the related population.

As part of our audit procedures, we used Geographic Information System (GIS)

software for geographic analysis and imported the results of this analysis into
Tableau to create visualizations (interactive map) to enhance the understanding of
our report. To improve the ease of use, we made minor locational changes to these
visualizations. These changes do not materially affect the accuracy or interpretation
of the underlying data or visualizations.

Report 2022-S-11 15
Statutory Requirements

Authority
The audit was performed pursuant to the State Comptroller’s authority as set forth
in Article V, Section 1 of the State Constitution and Article II, Section 8 of the State
Finance Law.

We conducted our performance audit in accordance with generally accepted

government auditing standards. Those standards require that we plan and perform
the audit to obtain sufficient, appropriate evidence to provide a reasonable basis
for our findings and conclusions based on our audit objectives. We believe that the
evidence obtained provides a reasonable basis for our findings and conclusions
based on our audit objectives.

In addition to being the State Auditor, the Comptroller performs certain other
constitutionally and statutorily mandated duties as the chief fiscal officer of New York
State. These include operating the State’s accounting system; preparing the State’s
financial statements; and approving State contracts, refunds, and other payments.
These duties may be considered management functions for purposes of evaluating
organizational independence under generally accepted government auditing
standards. In our professional judgment, these duties do not affect our ability to
conduct this independent performance audit of the Department’s services to workers
who are affected by closings and layoffs that are covered by the WARN Act.

Reporting Requirements
We provided a draft copy of this report to Department officials for their review and
formal written comment. We considered their response in preparing this report
and have attached it in its entirety at the end of the report. In their response,
Department officials indicated the steps they are taking or plan to take to address our
recommendations.

Within 180 days after final release of this report, as required by Section 170 of
the Executive Law, the Commissioner of the Department of Labor shall report to
the Governor, the State Comptroller, and the leaders of the Legislature and fiscal
committees, advising what steps were taken to implement the recommendations
contained herein, and where recommendations were not implemented, the reasons
why.

Report 2022-S-11 16
Exhibit

System Entry Results for Sample of 184 Notices

Regional Notices in OSOS Notices Not in OSOS Totals % Not in OSOS

Office
# of # of Affected # of # of Affected # of # of Affected % of % of Affected
Notices Employees Notices Employees Notices Employees Notices Employees
New York City 46 5,134 71 5,074 117 10,208 61% 50%
Hudson Valley 18 2,235 1 36 19 2,271 5% 2%
Long Island 10 528 14 1,652 24 2,180 58% 76%
Western New
6 1,799 1 40 7 1,839 14% 2%
York
Capital Region 5 260 – – 5 260 0% 0%
Central Region 1 77 3 96 4 173 75% 55%
Finger Lakes 5 136 – – 5 136 0% 0%
Mohawk Valley 1 42 1 10 2 52 50% 19%
North Country 1 52 – – 1 52 0% 0%
Totals 93 10,263 91 6,908 184 17,171 49% 40%

Report 2022-S-11 17
Agency Comments

Kathy Hochul, Governor

Roberta Reardon, Commissioner

May 26, 2023

Re: Draft Report – 2022-S-11, Issued 4/27/2023

Heather Pratt
Office of the State Comptroller
Division of State Government Accountability
110 State Street - 11th Floor
Albany, NY 12236-0001

Dear Ms. Pratt,

The New York State Department of Labor (Department) has reviewed the Office of the State
Comptroller’s (OSC) Draft Report related to Audit Report Number 2022-S-11 titled Services to
Workers Under the Worker Adjustment and Retraining Notification Act, for the period January 1,
2019 through April 27, 2022. The report contained four recommendations, below are the
Department’s responses:

Recommendation #1:

Implement a process to:

 Substantiate that employers that file late Notices meet exemption criteria; and
 Verify that employees pay affected employees when they cite past or planned
payments in late-filed Notices.

NYSDOL Response:

As part of the Department’s 4-year strategic modernization plan, we implemented an

electronic WARN Act portal for the submission of WARN notices. The enhanced WARN
portal allows employers to submit documentation, provide lists of impacted workers, and
send other important information – such as claimed exemptions – directly to the
Department in real time. Each submission is reviewed by WARN unit staff for
completeness and accuracy. The new portal allows for better case management of
notices, including ensuring that late filers meet the exemption criteria and/or that
employers pay affected workers when they cite past or planned payments.

On March 13, 2023, Governor Hochul announced1 the portal and new proposed
regulations to help ensure compliance with the WARN Act. The proposed regulations
clarify how remote work impacts WARN Act compliance and simplifies language to
ensure businesses better understand their obligations. The public comment period on
these regulations ends next week and the Department looks forward to adopting these
strengthened measures.

1
See https://www.governor.ny.gov/news/governor-hochul-announces-new-technology-and-regulations-help-
workers-facing-layoffs.
1

Report 2022-S-11 18
 Kathy Hochul, Governor
Roberta Reardon, Commissioner

Recommendation #2:

Follow up on Notices that were not entered in OSOS, including those identified by our
audit, and offer and provide Rapid Response services as appropriate.

NYSDOL Response:

The Department entered all notices identified by OSC into the One Stop Operating
System (OSOS) and reviewed them for completeness. The Department also conducted
follow-up to discuss Rapid Response services, where appropriate. Additionally, the
Department implemented a quarterly review process for OSOS data entry to ensure
data quality and mitigate future risks.

Recommendation #3:

Take steps to improve timely outreach to both employers and employees affected by
employment changes covered by the WARN Act.

NYSDOL Response:

It should be noted that the Department immediately engages businesses and impacted
workers whenever a potential layoff is identified, even before determining whether the
layoff is covered by the WARN Act.

The new WARN portal allows the Department to collect accurate and complete
information from the employer to rapidly facilitate outreach efforts. Upon submission, the
employer is notified that our dedicated Rapid Response staff will be engaging them to
discuss the free services available to support both the employer and the affected
workers. The Department also upgraded our WARN and Rapid Response websites to
inform both employers and affected workers about the enhanced services available in
an effort to increase utilization of services. Additionally, the Department implemented a
uniform tracking method that is used throughout all 10 regions to improve consistent and
timely employee outreach. Finally, the Department tracks employer outreach with
mechanisms in place to ensure that information collected is reviewed timely and
compliant with outreach expectations.

Recommendation #4:

Assess current and anticipated WARN activity to determine and pursue appropriate
WARN staffing levels.

NYSDOL Response:

The Department continues to analyze current and anticipated WARN activity. Multiple
vacancies have been posted and positions have been filled in the past six months.
Additional positions will be posted to ensure adequate staffing in the event of increased
WARN activity. Hiring to fill critical needs continues to be a priority for the Department. It
2

Report 2022-S-11 19
 Kathy Hochul, Governor
Roberta Reardon, Commissioner

should also be noted that there would have been no way to anticipate the amount of
WARN activity experienced during the COVID-19 pandemic.

If you have any comments, please contact Donald Temple, Director of Internal Audit
(518) 457-7332.

Sincerely,

Scott B. Melvin
Executive Deputy Commissioner

Cc: Roberta Reardon, Commissioner

Christopher White, Deputy Commissioner, Workforce Development
Dana Politis, Associate Commissioner, Workforce Development
Vicki Mockler, Deputy Bureau Chief, Workforce Development
Beau Duffy, Deputy Commissioner, Strategic Communications
Donald Temple, Director, Internal Audit
Samantha Doran, Auditor 3, Internal Audit

Report 2022-S-11 20
 Contributors to Report

Executive Team
Andrea C. Miller - Executive Deputy Comptroller
Tina Kim - Deputy Comptroller
Stephen C. Lynch - Assistant Comptroller

Audit Team
Heather Pratt, CFE - Audit Director
Brian Reilly, CFE, CGFM - Audit Director
Sharon Salembier, CPA, CFE - Audit Manager
Marisa Sutliff - Audit Supervisor
Theresa Nellis-Matson, CPA - Examiner-in-Charge
Kyle Creech - Senior Examiner
Erin L. Maloney - Senior Examiner
David DiNatale - Mapping Analyst

Contact Information
(518) 474-3271
StateGovernmentAccountability@osc.ny.gov
Office of the New York State Comptroller
Division of State Government Accountability
110 State Street, 11th Floor
Albany, NY 12236

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For more audits or information, please visit: www.osc.state.ny.us/audits/index.htm