California Suspends Notice Requirements for Layoffs Amid COVID-19 Emergency

March 24, 2020

The current COVID-19 pandemic has created uncertainty for employees and employers alike in an extraordinarily short amount of time. Many employers have had to close operations or consider significant layoffs without much time to plan.

On March 17, 2020, California Governor Gavin Newsom issued an Executive Order suspending enforcement of the state's Worker Adjustment and Retraining Notification (WARN) Act related to mass layoffs or closures caused by COVID-19. Specifically, employers of a particular size are no longer required to provide a 60-day advance notice of any layoffs or closure. Under normal circumstances, employers that fail to provide such advance notice and fail to qualify for one of the exceptions to the statutes can be liable to affected employees for up to 60 days of back pay and benefits. Under the executive order, the suspension of enforcement will last until the end of the COVID-19 emergency.

The California WARN Act applies to employers that operate a "covered establishment," defined as a California facility or part of a facility that employs, or employed within the preceding 12 months, 75 or more persons. These employers must provide the 60 days' advance notice if they:

1. Layoff 50 or more employees within a 30-day period at a covered establishment;
2. Remove all or substantially all of a covered establishment's operations to a different location 100 miles or more away; or
3. Cease or substantially cease industrial or commercial operations in a covered establishment.

Under the executive order, employers can be exempt from the notice requirement based on "unforeseeable business circumstances," which had only been available under the federal WARN act. Such an unforeseeable business circumstance has been identified as a "sudden, dramatic, and unexpected action or condition outside the employer's control." However, employers undertaking layoffs or closures must show a causal connection between the layoffs or closures and COVID-19 to avail themselves of the exemption. Employers must also still comply with certain requirements including the following:

• Provide written notice to affected employees, the California EDD, local and state government;
• Provide as much notice as possible and explain in writing why the notice period is shortened;
• Provide notification to affected employees of their eligibility for unemployment insurance benefits. Specifically, the following statement must be included in the notice: “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.”

For more information, contact Heidi C. Quan at hquan@murchisonlaw.com or (415) 524-4303.

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