The COVID-19 emergency has federal, state and local governments trying to mitigate the spread of the coronavirus by directing individuals to stay home when possible and avoid public gatherings, or issuing “shelter in place” orders. Many employers have had to make drastic changes to their operations, sometimes being forced to quickly downsize or close altogether.
Currently, California’s WARN Act requires employers of covered establishments to provide 60 days’ advance notice to affected employees when they must order a mass layoff, relocation or termination. If employers don’t comply with the Act’s requirements, they can potentially be held liable for up to 60 days of back pay and the value of benefits for all laid off employees plus additional civil penalties recoverable under the Private Attorneys General Act.
The Governor recognized the impossible dilemma for employers during these emergency circumstances and issued the executive order suspending the 60 days’ advance notice requirement (Labor Code section 1401(a)) and the provisions of the California WARN Act that impose liability and penalties (Labor Code sections 1402 and 1403) for the duration of the COVID-19 emergency, subject to certain conditions specified in the order, including:
Regarding the order’s requirement that the layoff/termination must be caused by COVID-19-related “business circumstances that were not reasonably foreseeable at the time that notice would have been required,” the state’s guidance confirms that the “business circumstances” should be understood to be consistent with the identical exemption under the federal WARN Act. It also notes that the U.S. Department of Labor has interpreted such “business circumstances” to include “[a] government ordered closing of an employment site that occurs without prior notice.”
The state’s CalWARN guidance also clarifies that the requirement for employers to give notice “as soon as practicable,” or reasonably possible, is meant to be consistent with the same provision of the federal WARN Act. Courts have observed that there is no bright-line rule on what constitutes a “practicable” notice period; it depends on the employer’s unique factual circumstances. Employers subject to CalWARN requirements should consult with legal counsel regarding their specific circumstances if they are facing a COVID-19-related mass layoff/termination.
The guidance also specifies that the notice must include:
CalChamber has developed the WARN Notice to Employees (California) — COVID-19 Exception and WARN Notice to State/Local Officials (California) — COVID-19 Exception. Only use these forms to notify employees and state/local officials of mass layoffs, relocations or terminations that are directly caused by COVID-19-related business circumstances.
Another important practical issue the state addressed was how employers are required to distribute the CalWARN notices. According to the guidance, notices are distributed as follows:
To Employees: When providing the required notice, any reasonable method of delivery that ensures receipt of notice is acceptable (e.g., first class mail, personal delivery with optional signed receipt, electronic mail, etc.).
To EDD: Please send an email to eddwarnnotice@edd.ca.gov and include the following information:
Attachments should be compatible with Microsoft Office or Adobe Reader software.
An employer may request acknowledgment of the receipt of their notification by including an acknowledgement request in the e-mail.
To the Local Workforce Development Board and Chief Elected Officials: Your Local Workforce Development Area (Local Area) will assist you in contacting the chief elected officials in those communities affected by the planned layoff or closure. Visit the Local Area listing by county website for information on how to contact your Local Area Board.
Employers can read the full text on the DIR website.
Employers must note that the Executive Order is specific to CalWARN requirements. Federal WARN requirements are still in effect and employers subject to the federal law must still comply with its notice requirements. Employers should consult with legal counsel about their notice obligations under state law, federal law and the new executive order.