Warn Act California

The WARN Act in California – What Employees Need to Know

The Worker Adjustment and Retraining Notification (WARN) Act is a federal law that offers protections for employees in the event of unexpected facility closures or mass layoffs. Many states, including California, have enacted their own WARN laws as well. This article will provide an overview of how the WARN Act works in California – who it applies to, what triggers notification requirements, and what remedies are available if notice is not provided properly.

What is the Purpose of the WARN Act?

The purpose of the federal and California WARN Acts is to give employees advance notice of imminent job losses due to plant closings or mass layoffs. This allows workers time to seek alternative jobs or enter skills training programs. Basically, the WARN Act aims to cushion the blow of unexpected unemployment.

Which Employers are Covered?

In California, the WARN Act applies to private businesses with 75 or more full-time employees. So smaller companies are exempt. The law also covers private non-profit organizations that employ that many workers.
Government agencies and public entities don’t need to comply with WARN requirements under California law.

What Triggers the WARN Notice Requirement?

Employers have to provide a 60-day advance notice if they are planning either:

• A mass layoff affecting 50+ employees at a single site of employment
• A closing that will shutter an office or plant and result in job losses for 50+ workers

So the magic number is 50. A layoff or closure impacting less than 50 workers does not trigger formal WARN notifications.
There are also exceptions – advance notice isn’t required if the closing or layoff is caused by business circumstances that were not reasonably foreseeable. For example, if a company suddenly loses a major client or government contract unexpectedly.

Notice Requirements for Mass Layoffs

Under the California WARN Act, a “mass layoff” is a reduction-in-force over a 30 day period that:

• Impacts 50+ employees
• AND accounts for 33% of the employer’s workforce

So let’s say a company employs 150 workers prior to any job cuts. If they decide to lay off 60 people within a 30 day span, that would activate WARN (60 is 40% of 150).
Whereas laying off 30 workers would not trigger notification requirements (30 is just 20% of 150).

Notice Requirements for Plant Closings

A “plant closing” refers to the permanent or temporary shutdown of a single employment site (office, factory, store, etc) if it results in job losses for 50+ employees.
So the distinction is that closings focus on a specific workplace, while layoffs can occur company-wide.
If a company closes multiple offices over a 90 day period – and each closing causes less than 50 workers to lose their jobs – they don’t need to provide WARN notices.

What Information Must be Included in the Notice?

Under California law, the WARN notifications provided to affected employees must contain:

• A statement that the notice is being issued under the CA WARN Act
• The name and address of the employment site facing closure or layoffs
• The name and phone number of a company contact for further info
• A statement about whether the planned action is permanent or temporary
• The expected date of the first worker dismissal/layoff and the anticipated schedule
• The job titles and number of affected employees in each job category

The employer must also provide notice to the local government body where the site is located – so the city, county, or town government offices.

How Much Notice is Required?

Companies are expected to give a 60-day advance notice under the California WARN Act. Though there are exceptions if the closure or layoff is caused by unforeseeable business circumstances.
The notice must be provided to:

• All employees who may lose their jobs (not just union reps)
• The local government where the site is located
• The state dislocated worker unit and chief elected official

Notifications should be provided in writing to employees’ last known addresses. Posting a notice at an employment site alone is not sufficient under the law.

Are there Penalties for Failing to Give Notice?

Yes. If an employer violates the 60-day WARN notification requirement, they can be sued by impacted employees for back pay and benefits.
Specifically, the company would have to pay workers what they would have earned for each day the notice wasn’t provided. So for example if only 30 days notice was given, the employer might need to pay employees for an extra 30 days of wages/benefits.
If an employer can prove they made a good faith effort to comply with the Act, a court may reduce the damages owed. But there is no “good faith” exception that allows the company to completely avoid penalties.

When Can Notice be Postponed or Excused?

There are certain exceptional circumstances where companies don’t need to provide full 60-day advance warning. Such as:

• Business circumstances that were not reasonably foreseeable – An unexpected disaster or sudden economic collapse that necessitates closures or layoffs without much notice.
• Faltering company – An employer who is actively seeking capital or business to stay open, and believes advance notice would scare away investors or customers.
• Chief executive becomes disabled – The top executive in charge of day-to-day operations suddenly dies, departs, or becomes seriously ill.

In these scenarios, the employer must give notice as soon as possible. The exact timeframe depends on the specific circumstances.
The company also needs to provide a statement explaining why they could not supply 60 days advance warning. This statement should be included together with the closure/layoff notice.

What Happens if I Don’t Get Sufficient Notice?

If you lose your job without receiving adequate advance warning, consider talking to an employment lawyer. You may have grounds to sue your employer for back pay, front pay, and other penalties.
An attorney can assess whether the company violated notification protocols. If they failed to comply with California WARN Act requirements, you could potentially recover 60 days worth of unused wages and benefits.
It never hurts to understand your rights and explore all options after an unexpected layoff. Don’t hesitate to consult with legal counsel. Many lawyers offer free consultations, so there is little risk just in discussing your situation.

The Bottom Line

The WARN Act provides important safeguards for California workers impacted by mass job cuts. While the law does not stop layoffs from happening, it at least gives employees advance notice – as well as recourse if notifications are not handled properly.
If your employer is planning a major downsizing event that could affect 50+ workers, they must provide a 60-day notice explaining what is happening and when. Failure to supply adequate warning can open the company up to lawsuits.
For more information on the California WARN Act and how it protects employees facing unexpected unemployment, contact an experienced employment law attorney in your area.