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Beverly Hills California WARN Act

If a California employer downsizes, conducts a mass layoff, closes a facility, or otherwise cuts a significant number of jobs, employees have certain rights. Unfortunately, employees don’t have a legal entitlement to keep their jobs, nor to be hired into other positions with the company or be considered for rehire. Employers are not prohibited from letting go off workers when financial times get tough.

However, employees do have the right to a certain amount of notice before a plant closing or large-scale layoff. If the employer fails to give proper notice, employees are entitled to damages.

The federal Worker Adjustment and Retraining Notification (WARN) Act give employees these rights. Almost half of the states have similar laws, and California is one of them. Although it doesn’t go as far as a few states, which require employers to pay a small severance or continue health benefits following a layoff, California law does expand the employers and employees who are entitled to advance notice of a layoff.

This article provides information on the rights of California employees under the federal WARN Act and California’s “mini-WARN” law. See the articles at our Losing or Leaving Your Job page for information on your other rights when you are laid off, including when you should receive your final paycheck, how to continue your health benefits, and more.

Covered Employers

WARN and California’s mini-WARN require certain larger employers to give advance notice of mass layoffs or plant closings that will result in a certain number or percentage of employees losing their jobs.

Under federal law, employers are covered only if they have at least 100 full-time employees or at least 100 employees who work a combined 4,000 hours or more per week. (Full-time employees are defined as those who work at least 20 hours a week and have been employed for at least six of the 12 months ending on the date when notice must be given under WARN.)

Under California law, employers are covered if they own an industrial or commercial facility that employs at least 75 employees.

Covered Layoffs

Not every layoff or plant closing is covered by federal or state law.

Federal WARN Act

WARN applies only to plant closings and mass layoffs.

  • A mass layoff is a reduction in force resulting in job loss at a single site of employment for 500 or more full-time employees, or for 50 to 499 full-time employees, if the number of employees laid off makes up at least 33% of the employer’s active workforce.
  • A plant closing is the shutdown of a single site of employment, or at least one facility or operating unit within a single site of employment, which results in job loss for 50 or more full-time employees during any 30-day period. A single site of employment is simply one geographical location of an employer’s operations, such as a building, an office suite, or a group of buildings that form a campus or industrial park. Even work areas that are physically separate can be a single employment site if they are reasonably close together, used for the same purpose, and share the same staff and equipment.

California’s Mini-WARN Act

California’s mini-WARN applies to the following situations:

  • A mass layoff, defined as job loss for at least 50 employees in a 30-day period.
  • The closing of an industrial or commercial facility with at least 75 employees
  • The relocation of an industrial or commercial facility with at least 75 employees to a location at least 100 miles away.

Required Notice

If a layoff or plant closing is covered by WARN or by California’s mini-WARN, employees who will lose their jobs are entitled to notice 60 days in advance. (Employees who are union members need not receive individual notice; instead, the employer must notify their bargaining reps, who are expected to pass the information along to the affected employees.)

The notice required is the same under federal and California law. It must provide specified information about the planned layoffs, including whether they are expected to be temporary or permanent, the expected date when the layoffs will begin and when the employee will receive a termination letter, and whether the employee will have bumping rights.

Exceptions To WARN Requirements

In some situations, an employer either does not have to give notice at all or can give less than 60 days’ notice.

No Notice Required

Neither WARN nor California’s mini-WARN apply to temporary or seasonal employees or to temporary projects that are completed, as long as the employees knew when hired that the jobs were for a limited time.

Under California law, an employer doesn’t have to give notice if the job losses were due to a physical calamity or an act of war. An employer also doesn’t have to give notice under state law if the employer was actively seeking capital that would have avoided or postponed any job losses at the time when notice should have been given. This exception applies only to plant closings and relocations.

Under federal law, WARN doesn’t apply to a plant closing or mass layoff resulting from a union strike or an employee lockout.

Shorter Notice Allowed

The exceptions noted above are the only ones recognized under California’s mini-WARN law. Under the federal WARN Act, employers may comply with WARN by giving as much notice as they can (even if they give less than 60 days’ notice) in a few situations. If an employer relies on one of these exceptions, it must give as much notice as possible and must state (as part of the written notice requirement) why it couldn’t give the full 60 days that would otherwise be required.

  • Unforeseeable business circumstances. If the business circumstances leading to the plant closing or layoff were not reasonably foreseeable when the employer should have given 60 days’ notice, a shorter notice period is allowed.
  • Faltering company. If a company is struggling financially when it should have given 60 days’ notice, it can give a shorter period of notice. However, the company must show that it was actively seeking business or money that would have allowed it to postpone or avoid the plant closing altogether, and that it reasonably believed, in good faith, that giving 60 days’ notice would have precluded it from obtaining the necessary business or money. This exception applies only to plant closings, not mass layoffs.
  • Natural disasters. If the layoff or plant closing results from a natural disaster, the employer is allowed to give less than 60 days’ notice.

Damages For Violating WARN And California Mini-WARN

An employer who violates either the federal or state WARN law may be ordered to pay all affected workers for all pay and benefits they lost for the period of the WARN violation, up to the full 60 days WARN requires. This amount is reduced by any wages earned or severance payments the employer made voluntarily during that time. For example, if an employer should have given 60 days’ notice, but gave notice only 40 days in advance of a layoff, employees would be entitled to 20 days of pay and benefits, unless the employer paid them severance covering that extra time.

Employers may also be ordered to pay the attorney fees and court costs of affected workers who sue and win. Employers who don’t give proper notice to the state may also have to pay fines, but this money goes to the state, not to employees.

If you believe your WARN rights have been violated, you should consult with an experienced California employment lawyer. WARN includes the right to attorney fees if you win, so it provides an incentive for lawyers to take strong cases. However, the damages available to any one employee are relatively low. Therefore, a lawyer may advise either trying to negotiate a settlement or going forward on behalf of all affected employees, as part of a class action lawsuit.

 

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