WARN Act Exceptions in Response to COVID-19

California’s WARN Act requires employers of certain covered establishments to provide 60 days written notice of any mass layoff, relocation, or termination. This notice is required to be given to employees and the Employment Development Department. An employer’s failure to comply with this requirement can result in being held liable for back-pay and value of the cost of any benefits to which the affected employee(s) may have been entitled for up to a maximum of 60 days.

Due to the COVID-19 crisis and emergency circumstances in which many employers now find themselves, the Governor of California has issued Executive Order N-31-20, which temporarily suspends the 60-days advance notice requirement and the provisions that impose liability and penalties on an employer for the duration of the COVID-19 emergency.

The suspension of these requirements is nevertheless subject to certain conditions:

  • The employers must still provide written notices pursuant to the WARN act of any impending mass layoff, relocation, or termination. However, rather than 60-days’ notice required by the Act, the employer must provide only as much notice as practicable and must include a brief statement of the basis for reducing the notification period.
  • The mass layoff, relocation, or termination must also be caused by COVID-19-related “business circumstances that were not reasonably foreseeable as of the time that notice would have been required.”
  • Finally, any written notices given after the date of the Executive Order (March 17, 2020) 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.”

Despite this temporary suspension concerning the California WARN Act, employers must nevertheless comply with the federal WARN Act. It is worth noting, however, that the federal act contains an “unforeseeable business circumstance” exception (29 U.S.C. § 2102(b)(2)(A)), on to which the Governor’s suspension cites. Although a COVID-19-related order for layoffs may fit that exception under the Federal Act, it is of course recommended that employers nevertheless consult legal counsel concerning the issuance of any such orders.

This document is intended to provide you with information about employment and labor law related developments. The contents of this document are not intended to provide specific legal advice. If you have questions about the contents of this alert, please contact the authors. This communication may be considered advertising in some jurisdictions.

March 24, 2020