A Warning on the WARN Act

The federal Worker Adjustment and Retraining Notification Act of 1988 (WARN) requires employers to give advance notice to employees and their representatives before closing down a facility or engaging in mass layoffs. This law has been expanded in California, and this blog provides a brief overview of the WARN Act as it affects California’s employers.

 

When Does WARN Apply?

In California, any business with more than 75 total full-time and part-time employees must comply with the requirements of the WARN Act. For an employee to count toward this total, they also must have been employed for at least half of the last calendar year, up to the date that the notice will be given. An employer must give notice if more than 50 employees will be laid off within a 30-day period. All plant closures also require notice regardless of how many employees may be affected, as do any relocations of at least 100 miles. 

The notice must be given to employees at least 60 days prior to their termination or transfer, as well as to the Employment Development Department (EDD) and various elected officials within the affected communities. More information regarding who must be notified and how can be found here: https://edd.ca.gov/en/Jobs_and_Training/Layoff_Services_WARN.

Exceptions to the Rule

Employers do not have to notify employees under certain circumstances. These include natural disasters that require the closure of the business and situations where the employer is actively attempting to raise capital and a WARN notice would negatively impact those efforts. There is also an exclusion for employees that were hired with the knowledge that their position was temporary, such as seasonal employees or those hired only for the duration of a project. 

Avoiding Penalties

Penalties for violations of the WARN Act include a penalty of $500 per day past the required date for a notice to be given, plus the payment of back pay for employees terminated before the required notice period and any medical expenses that might have been covered under an employee benefit plan. If suits arise out of the issue, courts may have employers pay the plaintiffs’ attorney fees, as well as require employers to pay the cost of any benefits that were lost upon termination.

Ensure Your Business Is in the Clear

California labor law is infamously complex, and the WARN Act is only one piece of the puzzle. Contact us today for qualified business & employment counsel so IGC can help you put the legal pieces together for your business.