Unfortunately, mass layoffs happen.
Although California’s labor laws cannot save a financially distressed company, the state has put into place important regulations to help protect some vulnerable employees.
The California WARN Act — the Worker Adjustment and Retraining Notification Act — requires many mid-sized and large companies that are planning mass layoffs to give sufficient notice to the affected workers.
The California WARN Act expands the protections granted under the federal WARN Act. It is a complicated law, and navigating your rights under the WARN Act can be challenging.
We at Workplace Rights Law Group want to ensure that all employees in California have the information needed to protect their rights.
Here, our Los Angeles wrongful termination attorneys provide an overview of the most important things that you need to know about the California WARN Act and layoff laws.
OVERVIEW OF THE CALIFORNIA WARN ACT
The primary purpose of the WARN Act California is to ensure that employees subject to mass layoffs are provided notice. It applies to most large employers that have substantial commercial or industrial operations within the state.
Companies will be subject to the WARN Act if they employed at least 75 people within the last 12 months. It should be noted that both full-time and part-time workers count towards the total.
What Are the Requirements for Employers?
As a general matter, California is an at-will employment state.
Without an employment agreement in place, employers typically have the authority to eliminate a worker’s position, as long as they are not doing so for an illegal reason such as gender discrimination or whistleblower retaliation.
However, in the context of mass layoffs, there is an exception: California’s WARN Act puts some additional legal obligations on companies.
Specifically, employers that are covered by California layoff law must comply with the following key legal requirement:
Provide at least 60 days’ notice to both employees and the government when conducting mass layoffs, relocating a facility, or terminating workers as a result of a plant closure.
Within this requirement, there are a number of different terms that must be defined.
To start, the California WARN Act defines a mass layoff as the elimination of at least 50 jobs within a 30-day period.
Next, state law defines a relocation as the moving of substantial business operations at least 100 miles away from the previous site.
Finally, a plant closure is the cessation or suspension of most or all of a company’s operations within a specific facility.
WARN Notice California: What Should Be Included?
To be legally valid, a WARN Act notice must meet certain basic requirements.
Among other things, California layoff law requires employers to include the following information within a written mass layoff notice:
- Details about the layoff, including the site that is closing;
- A description of the company’s future plans for the implicated positions, including whether the layoff is expected to be permanent or temporary;
- The date that layoffs are scheduled to begin as well as a basic schedule for the layoffs;
- An overview of the jobs being affected by the layoffs, including job titles and number of workers being let go; and
- Contact information for a company official who can be reached to provide employees additional information.
Employers must send their California WARN notices to the California Employment Development Department and the chief elected officials of the local governments where the layoffs occur.
California WARN Act Cases: A Few Recent Examples
In 2017, NASSCO, a San Diego, CA-based shipyard company, was ordered to pay workers more than $200,000 in compensation for back pay and loss of benefits.
The company laid off 90 employees, though it tried to argue that it was not truly a layoff because it initially planned for the layoffs to be a ‘temporary furlough’.
The California courts disagreed with the argument — ruling the company improperly failed to give notice under the WARN Act.
In 2018, a WARN Act lawsuit was filed against a California-based video game maker. The company laid off nearly 250 of approximately 275 total workers.
Soon after, several affected employees filed a WARN Act lawsuit in Northern California court.
The plaintiffs filed both a federal WARN Act claim and a California WARN Act claim. Notably, California state law offers much broader protections to workers.
What Are Employees Entitled to if Employers Have Violated These Rights?
Employers that violate WARN Act notice requirements in California are subject to strict penalties. As a starting point, state regulators have the authority to fine the company for each day of the violation.
More importantly for affected workers, an employee has the right to receive back pay and employment benefits for each day of the violation.
If you believe that your labor law rights were violated under the California WARN Act, you should speak to an experienced employment law attorney right away.
Our Los Angeles WARN Act attorneys can protect your rights.
Are There Any Exceptions to This Layoff Law?
Yes — there are some limited exceptions to the California WARN Act.
Employees should check to make sure that their company is covered by the law. Remember, the WARN act does not apply to most small-sized firms.
Beyond that, there are certain industry-based exceptions.
When employees work in the motion picture industry, construction industry, drilling, logging, or mining, and they were hired with a fundamental understanding that their term of employment was inherently limited, then the company may be excused from WARN Act regulations.
Finally, California law also grants some exceptions for serious disasters or calamities.
For example, if a major natural disaster hit Los Angeles, an employer that was forced to make mass layoffs as a direct result of that tragic event may be excused from the Warn Act’s notice requirements.
What Are My Rights Under the Federal WARN Act?
Under the federal WARN Act, an employee typically has a right to back pay, employment benefits, and attorney fees if their covered employer doesn’t give them 60 days’ notice before a mass layoff, termination, or relocation.
But, fewer employers are covered by this federal layoff law compared to the California layoff law.
In general, employers have to comply with the notice requirements in the federal WARN act only if they have 100 or more full-time employees who worked for at least six out of the last 12 months and:
- They execute a plant closing that involves 50 or more employees in a 30-day period;
- They lay off 50 to 499 full-time employees in 30 days, which cuts at least 33% of the full-time workers at one worksite; or
- They lay off 500 or more employees.
The WARN Act in California can be more favorable to employees for two reasons. First, it covers more employers than federal law.
And second, it can require violating employers to pay penalties and cover certain medical expenses of laid-off employees.
How Does COVID-19 Affect an Employer’s Obligations Under the WARN Act in California?
Currently, COVID-19 might not qualify as a “calamity” under the layoff law, and there are no specific COVID-19 exceptions to the California WARN Act Requirements.
But this is subject to change. Until July 1, 2021, the State of California relieved some employers from the 60-day notice rule if their layoff/termination/relocation was:
- COVID-19 related;
- Not reasonably foreseeable within the regular timeline; and
- In compliance with certain rules.
Employers now have to comply with the regular 60-day notice rules if they intend to lay off employees or close their businesses due to COVID-19.
However, the purpose of the previous rule suspension was to combat the spread of the virus. This virus has been through many changes, and the guidance on how to combat the spread has evolved multiple times.
As the virus and our understanding change, employers may once again be able to close shop with little warning.
You can track your employer’s obligations in California by visiting the California Department of Industrial Relations Webpage.
Are There COVID-19 Exceptions to the Federal WARN Act Requirements?
The Federal WARN Act might allow an employer affected by COVID-19 to bypass the 60-day notice rule if they can prove their virus-related layoff was an “unforeseeable business circumstance.”
A COVID-19 layoff/relocation/termination is an unforeseeable business circumstance when it results from a sudden, dramatic, and unexpected condition that is outside your employer’s control.
Even if your employer’s short notice was due to unforeseeable circumstances, they still have to take action to protect you. Employers that conduct layoffs because of COVID-19 have to:
- Give you as much notice as possible;
- Comply with the other elements of a WARN notice; and
- Include an explanation of why they gave less than 60 days’ warning in their WARN notice.
Regardless of whether you think your employer was exempt from giving you 60 days warning, speak to an attorney immediately.
There are many ways your employer might be violating the WARN Act when making drastic employment decisions.
SPEAK TO OUR LOS ANGELES WRONGFUL TERMINATION LAWYERS TODAY
At Workplace Rights Law Group LLP, our California employment law attorneys have extensive experience handling the complete range of wrongful termination claims, including WARN Act cases.
If you have any specific questions or concerns about the California layoff laws, we are available to help.
From our office locations in Glendale and Riverside, we serve communities throughout Southern California, including Los Angeles, Anaheim, Long Beach, Pasadena, Inglewood, Compton, and San Bernardino.