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California WARN Act: HR Guide for Employers

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5 min read
warn act california

HR managers need to understand the California WARN Act to protect employees during big workforce changes such as layoffs and plant closings. This quick guide covers what the Act is, who it applies to, notice rules, when it comes into play, and the penalties for not following it. It’s a straightforward overview to help HR professionals ensure they comply and safeguard employees during important work changes.

TABLE OF CONTENTS

What is the California WARN Act

The California Worker Adjustment and Retraining Notification (WARN) Act is a crucial piece of legislation aimed at safeguarding the rights of employees during significant workforce changes. Although the federal WARN act sets the baseline, some states such as California, New York, New Jersey, Wisconsin, and Illinois have additional requirements.  The act is applicable to covered establishments in California, ensuring that employees receive adequate notice in the event of plant closures, mass layoffs, or relocations. Employers must satisfy fed WARN as well as the state WARN act anywhere a covered establishment undergoes a triggering event.

Related: California Employment and Labor Laws explained

California WARN Act Requirements

To fall under the purview of the California WARN Act, an employer must qualify as a “covered establishment,” employing or having employed 75 or more full and part-time employees in the preceding 12 months. Employees must have a minimum of six months of employment within the 12-month period leading up to the required notice date.

CA WARN Covered Employers

Covered establishments include a diverse range of industrial or commercial facilities that meet the specified employment criteria. The Act’s application is broad, encompassing various businesses with more than 75 employees within the last 12 months. It applies to many industries, reflecting its commitment to protecting a wide array of workers.

California State WARN Notice Requirements

Employers subject to the California WARN Act must provide a 60-day notice before implementing a plant closure, layoff, or relocation. In addition to federal WARN requirements, notifications must be extended to the Local Workforce Development Board and the chief elected official of each relevant city and county government.

Apart from the federal requirements, the California WARN Act adds an extra step. Employers also need to inform the Local Workforce Development Board and the top elected official in each city and county where the changes are happening.

This extra layer of notification ensures not only that affected employees are well-informed but also that local authorities are aware of and ready for the potential impact on the community. Following these rules is vital for employers to meet legal obligations and maintain positive relationships with employees and local communities during big changes.

What Triggers California WARN Act

The California WARN Act is triggered by specific events that impact the workforce. These triggers include a plant closure affecting any number of employees, a layoff involving 50 or more employees within a 30-day period, irrespective of the percentage of the workforce, and a relocation of at least 100 miles that affects any number of employees. These events prompt the Act’s provisions, ensuring that employees receive advance notice and protection in the face of significant changes to their employment status.

The Act is triggered in the following scenarios:

1. Plant Closure: The California WARN Act applies when there is a plant closure affecting any number of employees.

2. Mass Layoff: A layoff of 50 or more employees within a 30-day period triggers the Act, regardless of the percentage of the workforce.

3. Relocation: The Act comes into play when there is a relocation of at least 100 miles that affects any number of employees.

When Does California WARN Act Apply

The California WARN Act outlines specific conditions under which it applies and provides exceptions to certain circumstances. The Act is applicable to a “covered establishment,” defined as an employer that has employed, in the preceding 12 months, 75 or more full and part-time employees. Similar to the federal WARN Act, employees must have a minimum of six months of employment within the 12 months preceding the required notice date to be counted.

The Act is triggered in the scenarios outlined above.

California WARN Act exceptions

However, there are exceptions to the application of the California WARN Act:

1. Project or Undertaking Completion: The Act does not apply if the closing or layoff results from the completion of a specific project or undertaking. This exception is applicable to employers subject to specific Wage Orders and specific industries. It applies when employees were hired with the understanding that their employment was limited to the duration of that project or undertaking.

2. Seasonal Employment: The notice requirements are exempted for employees engaged in seasonal employment when they were hired with the understanding that their employment was seasonal and temporary.

3. Physical Calamity or Act of War: Notice is not required if a mass layoff, relocation, or plant closure is necessitated by a physical calamity or act of war.

4. Capital or Business Pursuit: In specific conditions, notice of relocation or termination is not required if the employer submits documents to the Department of Industrial Relations (DIR), and the DIR determines that the employer was actively seeking capital or business. A WARN notice would have precluded the employer from obtaining the capital or business under these circumstances.

Understanding these trigger events and exceptions is crucial for employers to navigate the complexities of the California WARN Act and ensure compliance with its provisions.

WARN Act Penalty California

Violating the California WARN Act carries significant penalties for employers. In the event of non-compliance, employers may face a civil penalty of $500 per day for each day of the violation. Additionally, affected employees are entitled to receive back pay, calculated at the employee’s final rate or a three-year average rate of compensation, whichever is higher. Furthermore, employers are held liable for the costs of any medical expenses incurred by employees that would have been covered under an employee benefit plan.

The employer’s liability extends to the period of violation, capped at 60 days or one-half the number of days the employee was employed—whichever period is smaller. These penalties underscore the importance of adhering to the California WARN Act’s requirements, emphasizing the legal and financial consequences of failing to provide timely and proper notice to employees during significant workforce changes.

In conclusion, HR managers play a critical role in ensuring compliance with the California WARN Act, fostering transparency, and mitigating legal risks. Understanding the intricacies of the Act is essential for HR professionals to navigate the complexities of workforce changes while upholding the rights and well-being of employees.

warn notice letter template

California Work Sharing Program

The Work Sharing Program offers employers a temporary alternative to layoffs when facing reduced production or services. This initiative enables employers to minimize or eliminate layoffs across various industries, preserving trained employees and facilitating a swift recovery when business conditions improve. For affected employees experiencing reduced hours and wages, the program allows them to receive unemployment benefits, retain their current job, and mitigate financial hardships. This flexible approach benefits both employers and employees during challenging economic periods.

California Laws

Looking for more information about California? Read up on California wages, State holidays, and more!

California articles:

Offboarding during layoffs

Understanding and complying with the WARN Act is crucial for HR managers, fostering fairness and transparency during workforce changes. By ensuring employee rights and maintaining open communication, HR professionals contribute to a positive workplace culture and compliance with regulations. After notifying employees of impending layoffs, the next crucial step is initiating the employee offboarding process.

Offboarding with Factorial:

Factorial simplifies the offboarding process, streamlining tasks and ensuring a smooth transition for departing employees. With Factorial, you can efficiently manage exit procedures, such as collecting company assets, updating access permissions, and conducting exit interviews. Offboarding software simplifies the entire process from start to finish.

Key Features for offboarding during layoffs:

1. Clear Communication: Easily communicate departure details to the departing employee, including the last day of work, return of company property, and other essential information.

2. Task Automation: Automate offboarding tasks, such as revoking system access, updating records, and notifying relevant departments, saving time and minimizing the risk of oversight.

3. Documentation and Compliance: Ensure compliance by generating necessary documentation, such as termination letters and exit surveys, helping you maintain a comprehensive record of the offboarding process.

4. Access Control: Centralize access control management, making it simple to revoke access to company systems and confidential information, safeguarding your organization’s data.

By utilizing Factorial for offboarding, HR managers can enhance efficiency, maintain compliance, and provide a positive experience for departing employees.

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Did you like this article? Benjamin McBrayer has been a Content Writer for 5 years. He specializes in HR strategy and workplace trends. Check out Factorial's blog for more of his posts on time management in the office, productivity, and HR news.

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