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California ‘Baby’ WARN Act may Surface During Recession

Posted in Reductions in Force

The recent economic lull has lead to increased layoffs across different industries. Employers may be required to give advance notice to affected employees and certain government entities. There are Federal and State laws which discuss the issue of notice owed to employees before large layoffs. The Federal law is known as the Worker Adjustment and Retraining Notification or ‘WARN’ Act. California’s version of the WARN act (AB 2957, the ‘baby’ WARN Act) contains additional provisions employers should be aware of. The baby WARN Act applies to “mass layoffs”, “terminations” and “relocations” at “covered” establishments. There are no regulations interpreting the California version which makes it difficult to understand.

Under California’s baby WARN Act, employer is a “covered” if it has employed 75 or more persons within the preceding 12 month period. It is unclear whether this means 75 total people over the course of a year or 75 at any one point during the year. Second employer is a “covered” if there have been any “mass layoffs,” “terminations,” or “relocations” at a covered establishment. The terms are defined below:

  • Mass layoffs: layoffs of 50 or more employees within a 30-day time period at a covered establishment.
    • Only applies to employees who have been employed for more than 6 month
  • Terminations: the cessation or substantial cessation of industrial or commercial operations in a covered establishment
    • If the employer is classified as a covered establishment it does not matter how many employees are employed at the time of termination-notice is still required prior to termination
  • Relocations: the removal of all or substantially all of the industrial or commercial operations in a covered establishment to a different location 100 miles or more away
    • Removal to a new location within a short distance may not be classified as relocation but may be considered a termination which would require notice.

Notice Requirements

Covered Employers must provide at least 60 days’ notice to affected employees. Employers also have to provide notice to the California Employment Development Department, the local workforce investment board and the chief elected official of each city and county government within which the termination, relocation or mass layoff occurs.