Hunton Employment & Labor Perspectives

No doubt recognizing the unprecedented impact on business, Governor Gavin Newsom issued an Executive Order suspending the notice requirements under the California Worker Adjustment and Retraining Notification Act (WARN Act), Cal. Lab. Code §§ 1401(a), 1402, 1403. The Executive Order suspends existing law that could have otherwise required employers to provide 60 days’ notice before instituting mass layoffs, relocations, or terminations, and could potentially have imposed steep penalties on employers who failed to do so.  Certain notice obligations remain, however, under the Executive Order.

This comes as good news to many employers who, in reacting swiftly to the evolving public health conditions, have had to close their businesses without the ability to provide 60 days’ advance notice. Before the Executive Order suspended the 60-day notice requirement, employers that instituted immediate, emergency shutdowns faced potential liability under the California WARN Act, including civil penalties of $500 per day for up to 60 days and liability for up to 60 days’ of back pay for affected employees, among other potential damages.

Under Executive Order N-31-20, notice must still be provided. Executive Order N-31-20 requires the following:

• The suspension of the regular 60-day notice requirement pertains to a mass layoff, relocation, or termination that is caused by COVID-19-related “business circumstances that were not reasonably foreseeable as of the time that notice would have been required.”
• Employers must provide notice to affected employees, the Employment Development Department (EDD), the local workforce investment board, and the chief elected official of each city and county government within which the termination, relocation, or mass layoff occurs.
• Consistent with the federal WARN Act, employers must “give as much notice as is practicable,” and provide “a brief statement of the basis for reducing the notification period.”
• For notice given after March 17, 2020, the notice must contain the following statement: “If you have lost your job or been laid of 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.”

The Executive Order directs the Labor and Workforce Development Agency to provide further guidance by March 23, 2020 regarding how this will be implemented.