The federal spending cuts slated to take effect at the start of 2013 may trigger dismissal notices for tens of thousands of government contractors days before the Nov. 6 presidential election.
All but the smallest companies must notify their employees at least 60 days in advance when they know of specific, probable job cuts, The Washington Post reports.
The Labor Department said Monday it was “inappropriate” for contractors to send out mass dismissal notices because it is unclear if the federal job cuts will indeed occur. Still, lack of clarity persists.
“Businesses will want to maintain flexibility by issuing to all their employees who could get laid off,” writes Shai Akabas, an analyst at the Bipartisan Policy Center who has studied the issue.
“Employers wishing to pressure policymakers to overturn the [cuts] have an incentive to exaggerate the impact by including as many workers as possible,”
according to The Post.
The swing state of Virginia, where thousands of federal employees and contractors reside and work, could be especially hard hit, underscoring how the “fiscal cliff” is already beginning to affect the economy and business decisions.
Lockheed Martin, a defense contractor with more than 20,000 workers in the Washington area, says it may notify more than 100,000 employees of potential layoffs before the ballot, The Post says. Lockheed said Monday it is reviewing the new Labor Department guidance.
A representative for Boeing tells The Post that the company is bracing for a worst-case scenario where the spending cuts occur.
Some labor lawyers are accusing businesses of threatening to issue mass layoff notices to pressure lawmakers to scale back the planned spending cuts.
The defense industry is “manufacturing a hysteria about being forced to do it,” said Jack Raisner, a specialist in labor law.
Republicans accuse the White House of playing politics.
“The president is focused on preventing advance notice to American workers that their jobs are at risk and on perpetuating uncertainty,” Rep. Howard McKeon, R-Calif., chairman of the House Armed Services Committee, tells The Post.
According to a survey of economist by Reuters, the non-farm payrolls number for July, which will be reported Friday, is expected to be 100,000 net jobs, up from 80,000 in June. The unemployment rate is expected to remain unchanged at 8.2 percent.
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