As many counties in California issue executive orders and proclamations to either close certain businesses or shelter-in-place, California employers are faced with the difficult decision whether to lay off employees while they are closed. In the event of an immediate business closure, California employers were concerned with how to comply with the notice requirements for the California Worker Adjustment and Retraining Notification Act (Cal/WARN).
Under Cal/WARN a covered establishment is defined as an industrial or commercial facility that employs 75 or more employees (including part-time employees) during the preceding 12 months before the mass layoff. The Cal/WARN defines a mass layoff as one where 50 or more employees are laid off at a covered establishment, during any 30-day period. Typically, a mass layoff would require the covered employer to provide 60 days’ notice to employees and certain administrative entities.
On March 17, California’s governor provided guidance and issued an executive order clarifying how mass layoffs due to COVID-19 orders may be handled. While Cal/WARN still applies, the notice requirement is relaxed to be given “as soon as practicable.” The notices must include a basis for reducing the notification period, including reference to being due to “business circumstances that were not reasonably foreseeable as of the time of the notice would have been required.” The notices must also direct employees that they may be eligible for unemployment insurance and provide a link to http://www.labor.ca.gov/coronavirus2019
The governor’s order also charges the Labor Workforce Development Agency to issue further guidance regarding Cal/WARN by March 23rd.