Don’t Forget to W.A.R.N. Employees Before a Mass Layoff

Winter 2009Newsletters California Update - Employment Law

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Due to the country's current economic circumstance, many employers are faced with conducting mass layoffs or plant closures. In 1988, the federal Worker Adjustment and Retraining Notification Act (WARN) was implemented to assist employees and their families and communities in preparing for a plant closure or mass layoff by requiring employers to provide advance notice of the decision and imposing penalties for noncompliance.

In 2003, California created its own law providing for a similar notice for mass layoffs, relocations and terminations."Cal- WARN," as the law is often referred to, prohibits an employer from ordering a mass layoff, relocation or termination at a covered establishment unless the employer gives written notice of the order 60 days before the order takes effect.

Despite their similarities, there are several important differences between Cal-WARN and federalWARN. Most significantly, Cal-WARN applies to terminations at a "covered establishment," rather than a "single site of employment," and Cal- WARN applies in cases of "mass layoff, relocation or termination," rather than "plant closings" or "mass layoffs." Unlike federalWARN, Cal-WARN does not include an "unforeseen business circumstance" exception to notice. Employers are encouraged to consult with legal counsel if faced with a mass layoff, relocation or termination of business in California.