How to Layoff an Employee in California [The Ultimate Guide]

If your organization is located on the west coast and is currently experiencing downturn, you probably need to know how to layoff employees in California.

While federal laws and regulations about laying off employees in the United States are impactful, state laws around how to layoff an employee in California are far more stringent.

This means that if your organization is laying off any employees in California (even remote workers that telecommute), you will have to abide by the more stringent California laws.

So, what are these laws?

Well, laws and regulations about how to layoff an employee at the federal level derive from the Worker Adjustment and Retraining Notification Act. This is commonly referred to as the WARN Act.

The state of California has its own WARN Act that provides the regulations and laws around how to layoff an employee specifically in the state of California.

So even if you follow all of the federal regulations, if you don’t follow the state regulations, you will be in violation of the law.

Before we dive into laws specific to how to layoff an employee in California, let’s go over the federal WARN ACT regulations.

The federal WARN Act has several regulations that shape who the law should be applied to. It states:

• The WARN Act applies to your organization if you have over 100 full-time employees
• The WARN Act applies to all publicly and privately held companies
• The WARN Act applies to all organizations that are for-profit or not-for-profit
• A WARN notice must be given if there is a plant closing or a mass layoff

So, if you are an organization that has less than 100 full-time employees (FTEs), you do not have to comply with the WARN Act. If you have over 100 full time employees, the WARN Act will apply to you regardless of being public or private, for-profit or not-for-profit.

Those regulations are fairly simple to understand. The last one: “A WARN notice must be given if there is a plant closing or a mass layoff”, is a little bit more complicated because of the ambiguity of a “mass layoff” or “plant closing”.

According to LexisNexis, a plant closing is:

“If one or more facilities or operating units in a given location anticipate a shutdown that will affect more than 50 workers AND last more than 30 days.”

And a mass layoff is:

“If a series of layoffs over a 30 day period will result in the loss of 500 or more employees, WARN Act Notice must be given. Also, if a series of layoffs of more than 50 or less than 500 employees over a 30 day period will result in a loss of 1/3rd of the workforce, WARN notice must be given.”

You can read more about these qualifications in our blog “When and How Does the WARN Act Apply To Your Organization?”

Now, let’s run through a couple of examples:

1. A manufacturing company in San Diego, California has 45 employees. The organization is laying off over half of its employees due to the loss of a business contract.

Since the company has less than 100 employees, it does not have to give a WARN notice.

2. A non-profit organization with over 500 employees will be closing down an office in Sacramento, resulting in 134 employees being permanently laid off.

Since the company has more than 100 employees, and the facility that is closing will affect more than 50 employees for more than 30 days, giving a WARN notice is required.

Makes sense, right?

To comply with the federal WARN Act, you will need to let your affected employees know 60 days in advance of their last day with the organization. This can be done through several different delivery methods, as long as it is given in writing. The United States Department of Labor states that any reasonable method of delivery is applicable. However, according to the United States Department of Labor:

“Use of pre-printed notices that are regularly included in employees’ paychecks or pay envelopes are not acceptable and do not meet the WARN Act requirements.”

This means that if your organization regularly gives out notices about the workplace with your paychecks, providing a WARN notice this way isn’t sufficient. This is because your employees might not notice the notice since they are regularly given notices through this delivery method.

When creating your WARN notice to be given to employees, make sure to include the following items:

• Notify notice receivers of the upcoming reduction in force
• Explain whether this layoff will be permanent or if the workers can expect to be called to work again
• A time-frame of when layoffs will occur and when their position will be affected
• Your organization’s policy on bumping rights
• Severance benefits that your organization will provide
• Who the employees should contact for further information at your organization (usually an HR representative)

To comply with the WARN Act, your organization must also provide a notice to your government about your reduction event. Similar to the notice given to employees, this notice must be given 60 days in advance.

Now that you understand federal WARN Act regulations, let’s dive into the state WARN act regulations that mandate how to layoff an employee in California.

Unlike other states, California has specific state laws about layoffs that your organization will have to follow.

This means that if you are laying off employees in California, you will also need knowledge of these state regulations. Fortunately, California state laws don’t vary too much from the laws of the federal WARN Act.

The main differences are in what employers are covered by the WARN Act and what constitutes as a plant closing. California state laws on how to layoff employees have a more conservative view of which employers should have to comply with the WARN Act:

“Applicable to a “covered establishment” with 75 or more employees full or part-time. As under the federal WARN, employees must have been employed for at least 6 months of the 12 months preceding the date of required notice in order to be counted.”

This is different from the federal WARN Act that requires notice if a company has over 100 employees. Although the law is different, it doesn’t vary so much that it will cause a huge difference in how your organization complies with the WARN Act. (Unless your organization is in that small window of companies that have 75-99 employees.)

California state regulations also have a more conservative opinion as to what constitutes as a plant closing:

“Plant closure affecting any amount of employees. Layoff of 50 or more employees within a 30-day period regardless of % of workforce. Relocation of at least 100 miles affecting any amount of employees.”

This is different from federal regulations that have tiered levels of reporting based on employee size and the percentage of the workforce that will be affected:

“Plant closings involving 50 or more employees during a 30-day period. Layoffs within a 30-day period involving 50 to 499 full-time employees constituting at least 33% of the full-time workforce at a single site of employment. Layoffs of 500 or more are covered regardless of percentage of workforce.”

If you are laying off employees across state lines, you will also need to be aware of states that have different regulations that your organization must follow. If your organization is in this situation, it is best practice to find the state laws with the most conservative regulations and follow those across all of your locations.

In California, you can submit notice of a layoff by email or snail mail to the WARN Act Coordinator at the state Employment Development Division.

To submit my email, which is the preferred method, send your notification to eddwarnnotice@edd.ca.gov, either in the body of the email or as an attachment.

The WARN Act Coordinator can then reach out to you for more information, and your company can also request an acknowledgement of receipt in the email as well.

To submit by snail mail, send your notification to the following address:

WARN Act Coordinator

Statewide Services Unit

Workforce Services Division

Employment Development Department

P.O. Box 826880, MIC 50/Room 5099

Sacramento, CA 94280-0001

When notifying the WARN Act coordinator, California requires that you submit the following information:

• Name and address of the employment site where the plant closing or mass layoff will occur.
• Name and phone number of a company official to contact for further information.
• Statement as to whether the planned action is expected to be permanent or temporary and, if the entire plant is to be closed.
• Expected date of the first separation, and the anticipated schedule for subsequent separations.
• Job titles of positions to be affected, and the number of employees to be laid off in each job classification.
• For multiple lay-off locations, provide a breakdown of the number of affected employees and their job titles by each lay-off location.
• Indication as to whether or not bumping rights exist.
• Name of each union representing affected employees.
• Name and address of the chief elected officer of each union.

You can read more about these individual state laws by visiting the Employment Law Handbook website.

Always consult with your corporate counsel before executing a layoff event, and when researching laws regarding layoffs in your location.

Aley Brown

Aley is a versatile global business leader with proven experience managing high-performing teams and engaging a data-driven approach to strategies that exceed company objectives.