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If you are planning to lay off employees in the state of California, you will need to make sure that you comply with all regulations pertaining to the Worker Adjustment and Retraining Notification Act (commonly known as the WARN Act). This will ensure that your employees are treated fairly and that you are not penalized for your layoff or reduction in force (RIF) event.
To understand how to comply with the WARN Act in California, we will have to look at three different areas:
- The federal WARN Act requirements
- The state-specific WARN Act requirements in California
- How to comply with WARN Act California laws
Before we dig into our analysis for each of these areas, make sure to download our simple WARN Act checklist with the link below:
What Are the Federal WARN Act Regulations?
The WARN Act has several regulations that shape who the law should be applied to. This includes the following stipulations:
- 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.
The first three stipulations are relatively straightforward. The final stipulation, however, relies on the federal definition of a “plant closing” and “mass layoff,” which may vary from definitions set at the state level. We’ll get into that distinction for the state of California in a minute.
To comply with the WARN Act on the federal level, you will need to send a WARN notice to your affected employees 60 days in advance of their last day with the organization. Then to fully comply with the WARN Act, your organization must also notify the government about your reduction event. This notice must also be sent 60 days in advance to your state dislocated worker unit, as well as to the chief elected official of the local government in which your employment site is located.
Now let’s dive into the state-specific requirements for the WARN Act in California, and how that compares to the federal regulations above.
What Is the WARN Act in California?
As explained above, there are federal regulations resulting from the WARN Act that all states must abide by. In addition to that, some states also have more stringent regulations specific to the companies located in their state (as well as for employees working in that state, such as remote workers).
California is among those states which have tighter regulations that companies must follow. Let’s discuss each of the specific regulations companies located in California (or with employees working in California) must follow to comply with the WARN Act in that state, and how they compare to their federal counterparts.
How Many Employees Does CA WARN Act Have?
Like other states that differ from federal regulations, California has different requirements based on employee size and how many are impacted. According to the California Employment Development Department (EDD), this distinction pertaining to covered employers is:
“Applicable to a ‘covered establishment’ that employs or has employed in the preceding 12 months, 75 or more full and part-time employees. 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.”
As you can see, the CA WARN Act threshold for notification requirements are slightly lower than federal regulations, which pertain to employers who have over 100 full-time employees.
What Is the Layoff WARN Law in California?
In California, the definitions for mass layoffs and plant closings are considerably simpler than at the federal level. In the words of the California EDD, these definitions include:
“Plant closure affecting any amount of employees. Layoff of 50 or more employees within a 30-day period regardless of percent of workforce. Relocation of at least 100 miles affecting any amount of employees.”
In other words, mass layoffs encompass all layoffs occurring in any 30-day period of 50 or more employees. For plant closings, all such events will trigger the CA WARN Act, regardless of how many employees are impacted.
At the federal level, in comparison, the US DOL applies the WARN Act to all mass layoffs which “will result in an employment loss at the employment site during any 30 day period for 500 or more employees, or for 50-499 employees if they make up at least 33% of the employer’s active workforce,” as well as plant closings that “will result in an employment loss (as defined later) for 50 or more employees during any 30 day period.”
What Are WARN Act California Notice Requirements?
The WARN Act in California also requires additional notices to be sent to local government bodies, above and beyond the federal requirements. As we mentioned earlier, the federal WARN Act requires notice to be sent 60 days in advance to your state dislocated worker unit and the chief elected official of your local government.
The California EDD takes this a step further to require that:
“An employer must give notice 60-days prior to a plant closing, layoff or relocation. In addition to the notifications required under federal WARN, notice must also be given to the Local Workforce Development Board, and the chief elected official of each city and county government within which the termination, relocation or mass layoff occurs.”
What Is the WARN Act Penalty in California?
The federal government penalizes businesses that do not comply with the WARN Act by forcing them to provide back pay and benefits to employees for as long as the business is in violation.
Per the CA EDD, California takes this penalty a step further:
“A possible civil penalty of $500 a day for each day of violation. Employees may receive back pay to be paid at employee’s final rate or 3 year average rate of compensation, whichever is higher. In addition, employer is liable for cost of any medical expenses incurred by employees that would have been covered under an employee benefit plan.
The employer is liable for period of violation up to 60 days or one-half the number of days the employee was employed, whichever period is smaller.”
WARN Act California: Key Takeaways
While the WARN Act is simple enough to understand on a federal level, some states—including California—have their own additional laws to protect workers from mass layoffs and plant closings. This guide covered many of the key differences, but always be sure to refer to the California EDD website for the most comprehensive and up-to-date explanation of the law.
Understanding CA WARN Act requirements is vital if you do any business in the state of California, especially since the law is constantly evolving year after year. If you are planning a mass layoff or reduction event in California, please consult your legal team to ensure you are following all applicable local, state, and federal laws.
For information on the specific WARN Act requirements in other states that may apply to your organization, see our similar WARN Act state guides for New York, New Jersey, and Illinois.
It can also be extremely helpful to offer outplacement services to employees who are affected by any such plant closing or mass layoff event. These services can help support their transition and provide a solution for any issues that may arise. Consult with your legal team and company stakeholders about what solutions might be right for your organization to help you navigate the complexities of your reduction event in the state of California.
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