Spring has sprung. Unfortunately, for many employers, however, the new season is not marked by its characteristic hope and promise. Employers have been hit hard by decreased revenues, funding cuts, and increased costs.
Last month, Los Angeles city officials thought the elimination of thousands of positions might be "inevitable." As of this week, they are proposing a plan that calls for a 3% cut to most county departments and eliminates 310 vacant positions. Private employers have not been as lucky to avoid mass layoffs. According to Warntracker.com, employers have laid off over 20,000 employees in California to date.
At a time where mass layoffs seem to be the only option for many businesses to stay afloat, here's what private California employers should be mindful of to comply with the federal Worker Adjustment and Retraining Notification Act (WARN) 29 U.S.C. ยงยง 2101-2109 as well as California's complementary laws which require employers to give advance notice when facing a mass layoff or shutdown.
Consider whether WARN applies to your business
- Federal: Covers employers that employ either
100 or more employees, excluding part-time employees, or, 100 or
more employees, including part-time employees, if the employees
collectively work at least 4,000 hours each week excluding
overtime. The employees must have been employed for at least 6
months of the 12 months preceding the date of required notice in
order to be counted.
- California: Applies to a "covered establishment" that employs or has employed in the preceding twelve months, 75 or more full and part-time employees. Employees must be employed for at least six of the 12 months before the date of required notice to be counted. It also applies to call center employers who plan to order a relocation of a call center or one or more of its facilities or operating units.
Does your layoff trigger the notice requirements under WARN?
Federal:
- Will there be a covered plant closing? A plant closing means the permanent or temporary shutdown of a single site of employment, or one or more facilities or operating units within a single site of employment, if the shutdown results in an employment loss at the single site of employment during any 30-day period for 50 or more employees excluding any part-time employees.
- Will there be a covered mass layoff? A mass layoff is not the result of a plant closing. It is a reduction in force ("RIF") that results in an employment loss at a single site of employment during any 30-day period for at least 500 employees (excluding any part-time employees), OR at least 33% of the employees (including any part-time employees) AND at least 50 employees (excluding any part-time employees).
California:
- Will there be a termination? Termination means the cessation or substantial cessation of industrial or commercial operations in a covered establishment.
- Will there be a covered mass layoff? A mass layoff is a layoff of 50 or more employees at a covered establishment during any 30-day period.
- Will there be a relocation? A relocation is the removal of all or substantially all of a covered establishment's operations to a different location 100 miles or more away.
Do any exemptions or exceptions apply?
Federal |No notice is required if:
- There is an offer to transfer employees to a different site within a reasonable commuting distance; or
- The closure is due to unforeseeable business circumstances or a natural disaster; or
- A plant closing only affects a temporary facility; or
- A plant closing or mass layoff occurs because
- The closing is the result of the completion of a particular project or undertaking AND the affected employees were hired with the understanding their employment was limited to the duration of the facility or the project or undertaking; or
- The closing or layoff constitutes a strike or lockout not meant to evade the WARN Act.
California | No notice is required if:
- Closings or layoffs are the result of a project subject to Wage Orders 11, 12, or 16 of the California Department of Industrial Relations if employees were hired knowing that their employment would be limited to the project; or
- Employees who, when hired, know their employment is seasonal and temporary; or
- A mass layoff, relocation or termination is due to a physical calamity or act of war; or
- The employer was actively seeking capital or business that would have allowed the employer to avoid or postpone the relocation or termination AND the employer reasonably and in good faith believed a Cal/WARN Act notice would have precluded it from obtaining the capital or business.
Did the RIF occur in the context of a sale of a business?
The type of transaction can determine whether WARN notice is required.
If WARN requirements are triggered, be prepared to give notice.
- Under federal law, written notice at least 60 days in advance of the plant closing or mass layoff is required. Under California law, notice at least 60 days in advance of a mass layoff, termination, relocation, or relocation of a call center is required, and, in addition to federal WARN notice requirements, notice must also be given to the Employment Development Department, the local workforce investment board, and the chief elected official of each city and county government within which the termination, relocation or mass layoff occurs.
- Some exceptions to the 60-day requirement may apply.
- Notices require certain information to relevant parties. Ensure that all requisite information is included in the notices.
- Ensure that the method of service meets requirements.
An employer that violates the notice requirements can incur significant liability, including, but not limited to, back pay to each qualifying employee for each violation, benefits under an employee benefit plan, and attorneys' fees. If your business is considering mass layoffs, contact an attorney to ensure that proper protocol is followed. The discussion above is not meant to be an exhaustive discussion of the requirements and exceptions. As with so many areas of employment law, there are many nuances that employers should discuss with legal counsel.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
