California Governor Issues Order Relaxing Notice Requirements Under Cal-WARN for Coronavirus-Related Layoffs
Yesterday, California’s Governor issued an Executive Order, with immediate effect, to “suspend” the notice requirements of California’s WARN Act for employers faced with the sudden need to lay off employees as a result of the public health emergency surrounding Coronavirus. The California WARN Act (similar to the federal WARN Act) generally requires employers to provide 60 days’ advance notice of a plant closing or mass layoff to affected employees. This notice requirement is intended to give employees time, while still being paid, to plan for the change in their employment situation. The Cal-WARN Act’s only exception is for layoffs and closures caused by a physical calamity or act of war. The Act does not define the term “physical calamity,” leaving uncertainty as to whether the Coronavirus-related public health emergency qualifies. To ease the concerns of employers affected by closure requirements, Governor Newsom issued his executive order to make clear that employers are not required to strictly comply with the regular notice provisions of the Cal-WARN Act.
More specifically, the Executive Order states that for the period of March 4, 2020 through the end of the public health emergency, the provision of California Labor Code sections 1401(a), 1402, and 1403 are suspended for employers who order a mass layoff (layoff of 50+ employees within 30 days), relocation (moving substantially all operations to a location 100+ miles away), or termination (cessation or substantial cessation of operations) at a covered establishment. Importantly, however, the Governor did not completely eliminate the notice requirement; he just eliminated the requirement that notice be provided 60 days in advance where the business decision was due to the Coronavirus emergency and could not be reasonably foreseen. Employers still must provide as much notice as is practicable and include the content normally required by Cal-WARN and the federal WARN Act for a layoff or closure. The notice must also include a brief statement of the basis for providing less than 60 days’ notice. Additionally, for notices issued after March 17, 2020, they also must 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.”
Employers are cautioned that this Executive Order applies to the Cal-WARN Act only. Employers who are covered by the federal WARN Act also need to consider whether they are taking action that triggers federal WARN Act notice requirements or the notice requirements of other states with mini-WARN Acts. Those triggers are similar, but not identical, to the California WARN Act triggers. The federal WARN Act generally does not apply to temporary furloughs of less than 6 months. It also contains an “unforeseeable business circumstances” exception as well as a “natural disaster” exception, both of which seem likely to apply to Coronavirus-related closures/layoffs. Employers should strive to provide affected employees with as much notice as is practicable in the event of layoffs/closures and review the various state/federal WARN laws applicable to their employees.