Mass Layoffs Trigger Federal And California Law Notice Requirements

As this story about a recent restaurant closure illustrates, California employers who are downsizing in this dismal economy must comply with the federal WARN Act, and California’s “baby” WARN Act equivalent.

Most employers are aware that the federal WARN Act requires that employees must be given at least 60-days’ advance notice of certain large-scale layoffs. Many employers do not recognize that California’s separate state statute that also requires 60-day advance notice to employees, but also includes a substantially different definition of the types of layoffs that will trigger the notice requirement. For example, under California law, notice is normally required whenever 50 employees are terminated in 30 days from any facility that has employed 75 or more workers within the last 12 months. However, federal law applies when (1) a reduction in force of at least one-third of the full-time employees, provided the number of full-time affected employees is at least 50, at a single facility during any 30-day period; or (2) employment loss of at least 500 full-time employees at a single facility during any 30-day period, regardless of the percentage affected.

The penalties for non-compliance under California’s so-called “baby” WARN Act are much harsher than those under federal law.