In these uncertain times, businesses are being forced to consider drastic measures to weather the current economic crisis, including potential reductions in the workforce. However, businesses need to be aware of their obligations under both the federal and California Worker Adjustment and Retraining Notification (WARN) Act prior to implementing any mass layoff, relocation, or termination at a covered establishment.
The federal WARN Act requires covered employers to provide 60 days’ advance notice before terminating or laying off employees in connection with a plant closing or mass layoff. However, there are two exceptions to the 60 days’ notice requirement that may apply during the current pandemic: (1) for unforeseeable business circumstances, and; (2) for faltering businesses.
The California WARN Act also requires covered establishments to provide 60 days’ advance notice of a mass layoff, relocation, or termination as defined by Labor Code § 1400. However, unlike the federal Act, California WARN Act’s only exception to the notice requirements is layoffs caused by “physical calamity” or “act of war.”
In light of the COVID-19 crisis, on March 17, 2020, Governor Newsom issued Executive Order N-31-20, relaxing the California WARN Act’s notice requirement. The Order temporarily suspended the 60-day notice requirement for those employers that give written notice to employees and satisfy other conditions. The suspension was intended to permit employers to act quickly in order to mitigate or prevent the spread of coronavirus and largely mirrors federal WARN Act exceptions related to unforeseeable business circumstances and for faltering businesses.
The California Department of Industrial Relations has stressed that the Order does not suspend the California WARN Act in its entirety, it only suspends the California WARN Act’s 60-day notice requirement for those employers that satisfy the Order’s specific conditions. A business seeking to rely on the Order’s suspension of the 60-day advance notice requirement must satisfy the following conditions:
1. The employer must still provide written notices as specified in
the WARN Acts to the affected employees and the EDD, the
Local Workforce Development Board and the chief elected
official of each city and county government within which the
termination, relocation, or mass layoff occurs;
2. The business must provide notice that satisfies the following
a. Provides as much notice as is practicable at the time notice
is given, and provides a brief statement of the basis for
reducing the notification period
b. The layoff, relocation, or termination must be caused by
COVID-19 related business circumstances that were not
reasonably foreseeable at the time notice would have been
c. For notice given after March 17, 2020, the notice must also
include the following language, “if you have lost your job or
been laid off temporarily, you may be eligible for
Unemployment Insurance (UI). More information on UI and
other resources available for workers is available at
labor.ca.gov/coronavirus2019,” in addition to the contents
normally required to be included in a WARN Act notice.
The relief provided by the Order is retroactive, going into effect on March 4, 2020 and will be effective “through the end of this emergency.”
Even with the recent amendment to the California WARN Act businesses must still comply with the complex requirements of both the federal and California WARN Acts. Please contact the expert attorneys at RPNA to help guide your business through the precarious and potentially risky process of issuing a compliant WARN Act notice.
Please contact Nicholas Roxborough at (818) 992-9999, ext. 222, Drew Pomerance, at ext. 212, Michael Adreani, at ext. 234, or Trevor Witt, at ext. 224
In the meantime, we hope you are healthy and staying safe.