The Governor’s Temporary “Suspension” of parts of Cal-WARN

Just to keep the blog links going . . . Here is a link to the Labor Commissioner’s Guidance on Conditional Suspension of California WARN Act Notice Requirements under Executive Order N-31-20.  And below is some guidance about the “suspension” of parts of Cal-WARN.

FedWARN.  There are two “WARN” acts that California employers have to be mindful of – the federal WARN act and California’s Cal-WARN. And of course, they are different!

The federal WARN act applies to employers of 100 or more full-time employees (or 100 full-time and part-time employees who work a total of 4,000 non-overtime hours per week. A covered employer must give 60-days notice to affected employees and specified government officials before it: (i) shuts down an employment site that causes employment loss for 50 or more full-time employees; (ii) conducts a layoff that effects 50 or more employees and 33% or more of the total workforce at a single location; or (iii) lays off 500 or more employees at a single location. Of note during this current crisis is that federal WARN has several exceptions. WARN does not apply to layoffs lasting less than 6 months. Nor does WARN apply to closures or layoffs resulting from a “natural disaster.” Finally, an employer could give less than 60 days notice in the case of a closure or layoff resulting from “business circumstances that were not reasonably foreseeable.”

Cal-WARN. Cal-WARN applies to an employer who has employed 75 or more persons, including part-time employees, at a single industrial or commercial facility (called a “covered establishment”) within the preceding 12 months. An employer has to give 60-days notice before (1) terminating operations at the covered establishment; (2) relocating the covered establishment’s operations more than 100 miles; or (3) laying off 50 or more employees at the covered establishment in a 30-day period. For an employee to count as part of the 50-employee threshold, that person must have worked for the employer for at least 6 of the preceding 12 months. Cal-WARN doesn’t have some of the helpful exceptions of WARN with regard to the shelter in place, etc. While WARN only applied to layoffs exceeding 6 months, Cal-WARN applies to layoffs of any duration. As such, employers must comply with Cal-WARN even for a short-term layoff. Prior to the Governor’s Executive Order, Cal-WARN had no express exception for unforeseen business circumstances.

The Executive Order Change About Cal-WARN.  Governor Newsom’s  Exeuctive ORder, which I blogged a link to here: Relief regarding mass terminations from Governor Newsom applies from March 4, 2020, through the end of the declared State of Emergency, suspends the 60-day notice requirement of Cal-WARN for employers who meet certain conditions.

While Cal-WARN still applies, the notice requirement is to be given “as soon as practicable.” The notices must include a basis for reducing the notification period, including reference to being due to “business circumstances that were not reasonably foreseeable as of the time of the notice would have been required.” In order to avail themselves of the exception, then, employers must:

  • Provide the requisite written notices to employees impacted by the mass layoffs or shutdown, and state and local government;
  • Provide as much paid notice as possible, and to explain in writing to the impacted employees and state and local government why full notice cannot be given, and
  • Expressly notify employees of their eligibility for unemployment insurance benefits (the written notice must contain the following statement: “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“)

Employers must establish a causal connection between the mass layoff or shutdown and COVID-19. For example, if an employer was already planning a Cal WARN-triggering mass layoff or shutdown before the onset of the COVID-19 emergency, the executive order would not apply to such a layoff or shutdown.

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