OMB: Hold Off On Sequester Layoff Plans

Sara Sorcher

(See full story, "White House Moves To Head Off Sequester Layoffs")

White House Urges Defense and Other Gov't Contractors Not To Issue Mass Layoff Notices In Anticipation of Sequestration.

  • Guidance from Office of Management and Budget even goes so far as to say that the contracting agencies could cover any potential litigation costs or employee compensation costs that could follow.
  • OMB guidance comes amid worries that $109 billion in cuts to defense and domestic programs could kick in at the beginning of next year if the "fiscal cliff" standoff is not resolved.
  • Some defense companies—including Lockheed Martin, BAE Systems and EADS North America—have said they expect to send notices to their employees 60 days before sequestration takes effect to comply with the Worker Adjustment and Retraining Notification Act, which requires companies to give advance warning to workers deemed reasonably likely to lose their jobs. Companies appeared undeterred by July 30 guidance from the Labor Department, which said issuing such notices would be inappropriate, due to the possibility sequestration may be averted and because companies do not have enough information about how the cuts might be implemented to determine which workers or specific programs could be affected.