On March 17, 2020, California Governor Gavin Newsom issued an Executive Order suspending some of the notice requirements under the California WARN Act ("Cal-WARN"), the state counterpart to the Federal WARN Act. The order came in response to the sudden onslaught of workplace closings across California due to COVID-19.
Under the Cal-WARN, employers with 75 or more employees must give 60-days' written notice to employees and unions before layoffs occur. However, in this uncertain and quickly-changing environment, many employers have been forced to reduce their workforces or even shutter operations without providing their employees the requisite advance notice.
The Federal WARN Act exempts such employers from notice requirements under the "unforeseen business circumstances" exception, which applies when workforce reductions result from "sudden, dramatic, and unexpected action or condition outside the employer's control." 20 CFR § 639.9. However, Cal-WARN does not include such an exception.
In recognition that the requirements of the Cal-WARN may "prevent, hinder, or delay" actions to mitigate the effects of COVID-19, Governor Newsom's executive order waives the 60-day notice requirement for the duration of the State of Emergency which commenced on March 4, 2020. The order applies where COVID-19-related business considerations result in mass layoffs, relocations, or terminations that were not reasonably foreseeable as of the time that notice would have been required.
To qualify for the waiver of the 60-day notice requirement under the order, employers must:
- give written notice to its employees; the EDD, the local workforce investment board, and the chief elected official of the local city and county government;
- give as much notice as is “practicable," along with a brief statement of the basis for reducing the 60-day notification period;
- for written notice given after March 17, 2020, 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.”
California's wave of business closures due to the COVID-19 pandemic will continue to cause major financial disruptions for employers and employees alike.