COVID-19 Update: California Suspends Advanced Notice Provisions of Cal-WARN Act, with Conditions

California employers facing difficult layoff and termination decisions due to COVID-19 were granted a reprieve from the stringent notice requirements of the Cal-WARN Act. In a suspension backdated to March 4, 2020, the Governor of California issued an executive order concerning notification of employees about mass layoffs, relocations, and terminations caused by COVID-19. The order effectively adopts one of the exceptions from the federal WARN Act, in an effort to help employers during this crisis. 

The federal WARN Act provides that a temporary layoff of less than six months does not count as an employment loss in determining if a notice obligation arises in connection with a plant closing or mass layoff. States that have their own version of a WARN Act typically follow similar rules, but there are exceptions. One notable exception is California. In that state, a covered employer that undertakes a temporary layoff of 50 or more employees in a 30-day period may be required to provide 60 days of advance notice to the affected workers regardless of the duration of the layoff. 

Recognizing the rapid layoffs needed to prevent the spread of COVID-19, on March 17, 2020, the Governor of California issued an executive order that “suspended” the Cal-WARN Act. The suspension applies with respect to mass layoffs, relocations, and terminations that are caused by COVID-19-related “business circumstances that were not reasonably foreseeable as of the time that notice would have been required.” This language mirrors the federal WARN Act’s “unforeseen business circumstances” exception. The suspension is backdated to March 4, 2020 and will remain in effect until the end of the COVID-19 emergency. 

The suspension is predicated on certain conditions. An employer that orders a mass layoff, relocation, or termination at a covered establishment must still provide a Cal-WARN notice, give as much notice as is practicable, and, at the time notice is given, provide a brief statement of the reason for reducing the notice period. In addition, for actions taken after March 17, 2020, the notice must include the following statement:  

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.

Other states have provided similar guidance in the face of COVID-19. For example, New York’s Department of Labor has advised that if a business is forced to close due to coronavirus, the employer should provide notice as soon as possible and identify the circumstances that required the closure.

If you have questions about this order, its effect, or any other COVID-19 workforce issues, please contact one of Honigman’s Labor and Employment attorneys.