Under both the federal Worker Adjustment and Retraining Notification (WARN) Act and its California equivalent (Cal-WARN) covered employers are required to provide at least 60 days' notice before executing a mass layoff or termination of operations at a covered facility. The required notices must be provided to the impacted employee and to certain state and local officials. Employers that fail to provide the required notice may be liable for 60 days of backpay and/or civil penalties, unless one of the narrow exceptions apply.
Cal-WARN applies to “covered establishments” in California that employs or has employed 75 or more persons in the preceding 12 months. Employers intending to do any of the following at a covered establishment must provide the 60 days’ advance notice:
Although modeled after the federal WARN Act, Cal-WARN can be triggered more easily and contains fewer exceptions. Cal-WARN's requirement to provide 60 days’ notice (or 60 days pay in lieu of notice) can limit the options of a distressed company seeking to cut costs in the near term.
While federal WARN contains an exception where unforeseen business circumstances prevent an employer from providing the 60 days’ advance notice, Cal-WARN has lacked that exception.
However, on March 17, 2020, Governor Newsom issued Executive Order N-31-20, temporarily suspending portions of Cal-WARN and relaxing obligations for California employers affected by the COVID-19 pandemic. The Executive Order provides for the following:
The limited new Cal-WARN exception only applies from March 4, 2020 through the end of the current state emergency. Employers must remember that this Executive Order does not affect, suspend, or alter the requirements of the federal WARN Act or other states’ mini-WARN laws.