Local governments across New York stand at the forefront of the response to the COVID-19 pandemic. Unfortunately, they are also among the institutions facing the biggest challenges financially as the public health emergency subsides. This has enormous ramifications for tax-starved towns, cities and governments and their leadership.
Very few, if any, will escape the pain. The U.S. Conference of Mayors and the National League of Cities last month found that nine of every 10 cities are expecting deep reductions in revenue. The number approaches 10 out of 10 for smaller municipalities with populations of 50,000 to 500,000, according to a survey of 2,400 cities. As a result, “without federal support, many will be forced to furlough or lay off employees and cut back on critical services,” according to the League of Cities and Conference of Mayors.
On an operational level, city and county leaders will be confronted with the need to make tough choices to find the right balance between critical public services such as police and fire and the need to balance their budgets.
The challenge is even steeper given the myriad of labor and employment law issues implicated by these critical decisions. These operational changes require early and thorough consideration of labor and employment law risks. Some of the prospective issues include:
The following issues, among others, must be considered as municipalities implement cost-cutting measures:
- Compliance with rapidly changing state and federal COVID-19 regulatory obligations;
- Whether and how to implement furloughs, layoffs and/or pay changes;
- The impact of Collective Bargaining Agreements;
- The potential use of voluntary retirement incentive programs or other “buyout” mechanisms;
- Obligations imposed by the New York State Civil Service Law
One near-term consideration concerns policies and practices for when employees are brought back from furlough or layoff.
