This list provides a summary regarding California's WARN Act, which requires larger employers to provide advance notice prior to a mass layoff.
The Right to Notice
For employees of larger organizations (75 employees in the past year), the Cal-WARN Act is triggered when there is a "mass layoff." This means "a layoff during any 30-day period of 50 or more employees at a covered establishment."
"Layoff" has a special meaning under the Cal-WARN Act. It defines layoff as "a separation from a position for lack of funds or lack of work." The California Court of Appeal in The International Brotherhood of Boilermakers, etc. v. NASSCO Holdings Inc. (2017) 17 Cal.App.5th 1105, held that the word "layoff" includes both temporary furloughs, as well as more permanent or indefinite terminations.
The law also contains an exception to the notice obligation: “[A]n employer is not required to provide notice if a mass layoff, relocation, or termination is necessitated by a physical calamity or act of war.” Other statutes identify additional exceptions, including for certain industries (e.g., the motion picture industry and for certain employees (e.g., seasonal employees or employees hired for a limited project).
In the wake of COVID-19, Governor Newsom declared a state of emergency, and temporarily loosened some of the WARN Act's requirements. Nonetheless, employers must still provide as much notice as is reasonably practicable.
Damages, Penalties, and Other Relief for Employer Violations
An employer who violates the notice requirement “is liable to each employee entitled to notice who lost his or her employment,” and the damages consist of "[b]ack pay” and the value of any lost benefits to which the employee would be entitled to if “his or her employment [had] not been lost.” The law also provides that the amount of the employer's liability is reduced by “[a]ny wages … paid by the employer to the employee during the period of the employer's violation,” and any other voluntary, unconditional, or specified third party payments.
A failure to provide notice to the specified public officials and agencies may subject the employer to a penalty of no more than $500 “for each day of the employer's violation,” unless the employer pays the employees within three weeks from the date of the layoff/relocation/termination order. Additionally, the penalties may be reduced if the “employer conduct[s] a reasonable investigation in good faith, and had reasonable grounds to believe that its conduct was not a violation of [the California WARN Act].” A prevailing employee is entitled to recover reasonable attorney fees, but a prevailing employer is not.
