Because of worker mistreatment, the government enacts labor laws to protect employees. One of these laws, the California Worker Adjustment and Retraining Notification (WARN) Act, protects workers when companies plan mass layoffs.
WARN protects employees, their families, and communities by requiring California employers to give a 60-day notice to the affected employees and both state and local representatives before a plant closing or mass layoff. Advance notice provides employees and their families time to transition and adjust to the potential loss of employment, time to seek alternative jobs and, if necessary, time to obtain skills training or retraining to compete in the job market successfully.
California’s WARN Act expands on the federal WARN Act, providing additional protection for California workers.
Here, we highlight key points about the California WARN Act so that you can protect your rights at work.
The California WARN Act is a regulation that requires covered employers to provide workers and local government officials with at least 60 days’ notice before one of the following three triggering events: (1) mass layoff/termination of 50 or more employees in a 30-day period; (2) plant closure/cessation (or substantial cessation) of business activities; or (3) major relocation of all (or substantially all) of a business operation to a new location 100 or more miles away.
The California WARN Act, also known as "Cal WARN," mandates that any industrial or commercial operations employing or having employed at least 75 individuals within the past 12 months (referred to as a 'Covered Establishment') must provide 60-day notice to employees and the appropriate LWDA (Labor and Workforce Development Agency) official before a qualifying layoff, relocation, or termination occurs.
This warning period gives workers time to look for new jobs. It also gives their families time to adjust their budgets in preparation for a layoff or prepare to move for a relocation.
Workers can also use this time to seek job training for a new line of work.
Companies with 75 or more employees must provide workers with a warning of mass layoffs or relocations.
These companies do not have to provide contractors with warnings, but they must provide full-time and part-time employees with notice.
Only employees who have worked for the company for six of the past 12 months count towards the minimum number of employees calculation.
It is not enough that notice be sent 60 days prior to the event, the employees must actually receive the notice at least 60 days beforehand. It is important for employers to give themselves enough time to ensure that all employees have been notified properly and in the required time. Even if the date on the notice is 60 days before the mass layoff, relocation, or plant closing, the California employer may still have to pay fines or compensate employees for lost wages if the notice is not received in time. If notifying employees directly, it may be wise to have signed confirmation of receipt.
Employers have a few options for informing employees of mass layoffs, relocations, and plant closures. However, it always must be written notice and given at least 60 days' advance notice.
When drafting a WARN notice, employers must include the following WARN requirements:
If there are multiple worksites and locations being affected by the layoffs, relocation, or closure, then each location should have its own breakdown of affected employees, unions, and timeframe.
As with many laws and regulations, there are some exceptions that may apply. There may be situations where an employer is unable to provide at least 60 days’ advance notice or circumstances where advance notice is not necessary. The California WARN Act allows for a few reasonable exceptions.
Temporary Employment – When an employee is hired for a temporary job or seasonal employment, they enter the employment relationship with an understanding that their employment will be terminated at a specific date or the completion of the specific project. Although it can be considered a mass layoff when the project or season comes to an end, a WARN Act notice is not needed because the employees were already informed at the beginning of their employment. There are many types of work that call for large quantities of employees to be hired and then let go all at once, such as:
War & Natural Disasters – When an act of war, natural disaster, or other calamity forces a company to conduct a mass layoff, plant closure, or relocation, it may not be possible for the employer to give their employees advance notice. In these situations, those employers are not bound by the WARN notice requirements.
Actively Seeking Capital – Sometimes, layoffs, relocations, or closures are a last resort due to the impacts they have on business or seeking capital. In cases where an employer is trying to prevent this from happening, it may be too late to give enough notice when they are finally forced to take such action. An employer may be exempt from giving at least 60 days advance notice if they can prove all of the following:
Employers are responsible for providing their employees with the proper warning at least 60 days prior to any mass layoff, relocation, or closure. If they fail to do so, they can face serious consequences.
Employers can be fined up to $500 for each day, meaning that if an employer gave their employees 50 days’ notice, they could have to pay $5,000 in fines. They may also be responsible for compensating the employees for whatever wages or benefits that they would have received in the employee benefit plan, including coverage for any medical expenses incurred in that time. However, if the employer did provide any wages during the violation period, that amount would be subtracted from the total compensation the employee may be awarded.
The WARN Act violation period is either 60 days prior to the event minus the number of days’ notice the employee was given or half of the number of days they were employed, whichever number is smaller. In the event that an employee sues their employer for a WARN Act violation, the judge may award reasonable attorney's fees.
There is also a federal Worker Adjustment and Retraining Notification Act that serves a similar purpose but has its own standards and regulations. Employers are only bound to the federal WARN Act if they have 100 or more employees. This only counts part-time if the total number of hours worked by all of the part-time employees amounts to at least 4,000 per week.
Federal law also sets mass layoff minimums at 500 employees or 33% of employees. In order for 33% of employees to be considered a mass layoff, there must be at least 50 employees laid off. While the California WARN Act does not have a minimum requirement for plant closures, The federal act requires that at least 50 employees be affected, not including part-time workers.
Furthermore, employers are exempt from the federal WARN Act in the event of relocation if they offer their employees placement at the new worksite and the employees accept or if the job offered is within a reasonable commuting distance. Finally, the federal WARN Act makes exceptions for employers who are unable to give at least 60 days' notice due to unforeseeable business circumstances, while the California WARN Act does not.
The following chart summarizes the major differences between the federal and California laws:
If you file a WARN Act claim, you can recover back pay, the value of employee benefits, and the cost of any medical expenses that would have been covered under an employee benefit plan.
In calculating missed pay and benefits, employees can recover back pay for a maximum of 60 days following their termination.
If your employer violated the WARN Act by failing to give you notice of a mass layoff, you might be able to file a claim. An employment lawyer can help you gather information, calculate damages, and file a WARN Act California claim.
Reach out to our experienced attorneys to understand your options and ensure your rights are protected. Don't hesitate to contact our California Law firm - Freeburg & Granieri, APC, for a free consultation to learn more about filing a WARN Act claim.
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