NEW YORK (CNNMoney) — The White House on Friday told government contractors worried about fiscal cliff spending cuts to hold off on warning employees about possible layoffs.
The government said it would cover legal costs if contractors are forced to slash their payrolls because of the looming $109 billion in automatic cuts next year and are alleged to have violated the WARN Act.
The federal WARN Act requires businesses with more than 100 employees to notify workers at least 60 days in advance of a mass layoff or plant closing. Some states require more notice.
“Any resulting employee compensation costs for WARN Act liability as determined by a court, as well as attorneys’ fees and other litigation costs (irrespective of litigation outcome) would qualify as allowable costs and be covered by the contracting agency, if otherwise reasonable and allocable,” the Office of Management and Budget said in its guidance.
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