CALIFORNIA SUSPENDS SELECTED FEATURES OF STATE WARN ACT FOR LAYOFFS DUE TO COVID-19
On March 17, 2020, Governor Newsom issued Executive Order N-31-20, which addressed the California Worker Adjustment and Retraining Notification (WARN) Act and its 60-day notice requirement for closures of establishments. Pursuant to the directive in that order, the California Department of Industrial Relations (“DIR”), Division of Labor Standards Enforcement (“DLSE”) and the Employment Development Department (“EDD”) have provided guidance regarding the order’s conditional suspension of the California WARN Act. Some of the questions and answers are reviewed below.
1. Is there a change to the 60-day notice requirement in the California WARN Act because of the COVID-19 pandemic?
Yes. Governor Newsom issued Executive Order N-31-20, which temporarily suspends the 60-day notice requirement in the California WARN Act for those employers that give written notice to employees and satisfy other conditions. The suspension was intended to permit employers to act quickly in order to mitigate or prevent the spread of coronavirus.
The Executive Order does not suspend the California WARN Act in its entirety, nor does it suspend the law for all covered employers. It only suspends the California WARN Act’s 60-day notice requirement for those employers that satisfy the order’s specific conditions.
2. What impact does the Executive Order have on an employer’s ability to close an establishment (temporarily or permanently) because of COVID-19?
Recognizing that employers have had to rapidly close down their businesses to prevent or mitigate the effects of the COVID-19 pandemic, but have not been able to provide their employees the usual advance notice of at least 60 days, the Executive Order provides a conditional suspension of the usual 60-day notice requirement. For purposes of the California WARN Act, closures can occur in one of three ways:
• A mass layoff: a layoff during any 30-day period of 50 or more employees at a covered establishment.
• A relocation: the removal of all or substantially all of the industrial or commercial operations in a covered establishment to a different location 100 miles or more away.
• A termination: the cessation or substantial cessation of industrial or commercial operations in a covered establishment.
3. What conditions must an employer satisfy to qualify for the Executive Order’s suspension of the California WARN Act’s 60-day notice requirements?
An employer seeking to rely on the Executive Order’s suspension of the California WARN Act’s 60-day advance notice requirement must satisfy the following conditions:
(1) The employer’s mass layoff, relocation or termination must be caused by COVID-19-related “business circumstances that were not reasonably foreseeable at the time that notice would have been required.”
(2) The employer must provide written notices to:
• Employees affected by the mass layoff, relocation or termination;
• All representatives of employees affected (such as their union);
• EDD; the Local Workforce Development Board; and the chief elected official of each city and county government within which the termination, relocation, or mass layoff occurs.
(3) The employer must provide written notice that satisfies the following requirements:
(a) Give as much notice as is practicable (i.e., reasonably possible) at the time notice is given to employees and their representatives.
(b) Provide a brief statement as to why the 60-day notification period could not be met.
(c) Include 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”
(d) Include the following information:
i. Name and address of the employment site where the closing or mass layoff will occur.
ii. Name and phone number of a company official to contact for further information.
iii. Statement as to whether the planned action is expected to be permanent or temporary and, if the entire location is to be closed, a statement to that effect.
iv. Expected date of the first separation, and the anticipated schedule for subsequent separations.
v. Job titles of positions to be affected, and the number of employees to be laid off in each job classification.
vi. In the case of layoffs occurring at multiple locations, a breakdown of the number and job titles of affected employees at each location.
vii. An indication as to whether or not bumping rights exist.
viii. Name of each union representing affected employees, if any.
ix. Name and address of the chief elected officer of each union, if applicable.
4. How do I send the California WARN Act notices?
To Employees. When providing the required notice, any reasonable method of delivery that ensures receipt of notice is acceptable (e.g., first class mail, personal delivery with optional signed receipt, electronic mail, etc.).
To EDD. Please send an email to email@example.com. Please provide the following information in the e-mail to EDD:
• The notice (as an attachment or within the body of the e-mail); and
• Contact information for an employer representative in the event that EDD needs information.
Attachments should be compatible with Microsoft Office or Adobe Reader software.
An employer may request acknowledgment of the receipt of their notification by including a request for acknowledgement in the e-mail.
To the Local Workforce Development Board and Chief Elected Officials. Your Local Workforce Development Areas (Local Areas) will assist you in contacting the chief elected officials in those communities affected by the planned layoff or closure. Visit the Local Area listing by county website for information on how to contact your Local Area Board.
5. How do I know if I am an employer covered by the California WARN Act?
The California WARN Act is applicable to employers that employ, or have employed in the preceding 12 months, 75 or more full-time or part-time workers.
6. What should an employer do with respect to notice if a closure occurred on or after March 4, 2020 but before the Executive Order was issued on March 17, 2020?
The COVID-19 state of emergency began on March 4, 2020. Between that date and the issuance of the Executive Order, because the California WARN Act was not subject to suspension, employers should have been providing notice as specified under the Act. Now that the Executive Order is in effect, an employer seeking to avail itself of the suspension must satisfy the conditions specified in the Executive Order (described in response to Question (3) above).
7. Do I still need to send a WARN Notice to EDD given the Executive Order suspending the 60-day notice requirement?
Yes. The Executive Order does not eliminate the written notice requirement—it only reduces the notice period. An employer is required to give as much notice as is practicable (i.e., reasonably possible) at the time notice is given. Employers who order a mass layoff, relocation or termination without any written notice could be subject to liability under the California WARN Act.
8. If an employer fails to give any notice at all on the basis that the layoff or closure is due to a “physical calamity,” will that employer be shielded from liability?
Only if the employer can prove that the claimed physical calamity actually meets the definition of a “physical calamity.” The Executive Order does not affect the California WARN Act’s so-called “physical calamity” exemption. That exemption permits an employer to avoid providing any notice altogether. To avail itself of the exemption, an employer would need to prove that the COVID-19 pandemic is a “physical calamity.” By contrast, the Executive Order temporarily suspends the usual 60-day requirement for those employers that provide notice to affected employees and fulfill the Executive Order’s other conditions. The employer would not have to demonstrate that the COVID-19 pandemic is a “physical calamity” if they follow the conditions of the Executive Order.
9. How long is the California WARN Act temporarily suspended by the Executive Order?
The Executive Order’s suspension of the California WARN Act is for the period that begins March 4, 2020 through the end of the state of emergency declared as a result of the threat of COVID-19.
10. Where can I find more information for employers and employees in California about COVID-19?
Additional information and other resources are available at: ALERT Newsletter today!