When considering an employee layoff or business shutdown, as we reported here, employers should keep in mind that longer layoffs in California will trigger Cal-WARN Act rules. Unlike its federal counterpart, California’s WARN Act has no exception for unforeseen business circumstances and requires every facility that employs or employed 75 or more persons within the last 12 months to give 60 days’ written notice to the employees and certain government officials before any mass layoff that will result in a loss of employment for 50 or more people in any 30 day period. Cal-WARN also applies to the closing of a facility, which is defined as the “cessation or substantial cessation of industrial or commercial operations” in a covered facility.

However, as we also reported here, certain Cal-WARN provisions were suspended by Governor Newsom’s Executive Order N-31-20 for the duration of the COVID-19 emergency, but employers must still meet all notice requirements. Specifically, covered facilities that order a mass layoff, closing, or relocation as a result of COVID-19 business circumstances that were not reasonably foreseeable at the time notice would have been required must still provide written notice to employees and government officials. The written notice to be provided is the same as the notice required by Labor Code sections 1401(a)-(b), and must be sent with as much notice as is practicable and with a brief statement as to the reason for the reduced notice period as well as additional language regarding unemployment benefits. Violations trigger an obligation to provide back pay, the value of benefits, penalties of $500 per day, and attorneys’ fees.

For further information, California’s Labor Commissioner’s Guidance regarding Governor Newsom’s Executive Order can be found here.

The federal government has a similar law that applies to employers with 100 or more full-time employees who worked for at least 6 of the last 12 months, but the law does not encompass layoffs that are less than 6 months in length and, when applicable, has an exception for unforeseen business circumstances that permits as much notice as is practicable under the circumstances. Other states and territories have mini-WARN Act laws, including New York, Connecticut, Hawaii, Illinois, Kansas, Maine, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, Oregon, Rhode Island, South Carolina, Tennessee, Wisconsin, Puerto Rico and the U.S. Virgin Islands, which should be examined before undertaking any shutdown or layoff in these locations. 

The author would like to gratefully acknowledge the assistance of Joanne Warriner.

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