Gov. Davis has signed into law state layoff notice requirements similar to those in the federal WARN Act—but broader. We’ll explain what you need to know about the new state law, which we’ll call “Cal/WARN.”
Federal WARN Coverage
The existing federal WARN Act applies to employers with more than 100 workers. And notice under WARN is triggered only by mass layoffs involving at least 33% of the workforce, or 500 employees, in a 30-day period, or plant shutdowns displacing 50 or more employees during a 30-day period.
Join us this fall in San Francisco for the California Employment Law Update conference, a 3-day event that will teach you everything you need to know about new laws and regulations, and your compliance obligations, for the year ahead—it’s one-stop shopping at its best.
More Employers Now Covered
Effective Jan. 1, 2003, the new Cal/WARN law, A.B. 2957, will require industrial or commercial facilities employing 75 or more workers within the past 12 months to provide 60 days’ written notice to employees under the following circumstances: 1) before conducting a mass layoff of 50 or more employees during any 30-day period; or 2) before a plant closing or relocation that affects all or substantially all workers at the facility.
Notice Requirements
Under Cal/WARN, employers must notify the affected employees, the California Employment Development Department, the local workforce investment board and the chief elected official of each city and county government where the layoff occurs. The notice must be in writing and contain all of the elements required by federal WARN. If you’re covered by federal WARN, you can use the same notice to comply with both laws.
Some Exceptions
You don’t have to provide notice if the layoff, relocation or termination is because of an act of war or physical calamity. Another exception exists for employers who can demonstrate that they were actively seeking capital or business that would have enabled them to avoid or postpone relocations or terminations, although this exception doesn’t apply to mass layoffs.
Also, the Cal/WARN notice rules don’t apply if the closing or layoff is the result of completing a particular project of an employer that’s covered by Wage Order 11 (Broadcast Industry), Wage Order 12 (Motion Picture Industry) or Wage Order 16 (On-Site Construction).
Hefty Penalties
Employers who don’t provide proper notice under Cal/WARN can be hit with a $500 civil penalty for each day of the violation, plus attorneys’ fees. You can also be on the hook for up to 60 days of back pay, the cost of benefits the employee would have been entitled to, and medical expenses incurred that the employee’s benefit plan would have covered.
Severance Pay Bill Vetoed
On another layoff matter, Gov. Davis gave employers a win, vetoing A.B. 2989, which would have required employers to pay severance to laid-off workers under certain circumstances.