The Workers Adjustment and Retraining Notification (“WARN”) Act requires employers with over 100 employees to follow certain notice requirements when laying off employees. 20 C.F.R. 693.6. WARN requires employers with 100 employees or more to give affected workers at least 60 days’ notice of any plant closing or mass layoff, with exceptions for, among others, “unforeseeable business circumstances.” In short, a “plant closing” occurs when a facility is closed for 60 or more days, and a mass layoff occurs when a layoff, lasting at least six months, affects either: 500 or more workers, or at least 33% of the workforce when the layoff affects between 50 and 499 workers.
However, states can enact their own “mini-WARN” laws if the laws are (1) more protective to employees; (2) apply to smaller businesses; or (3) do not conflict with the federal requirements. Currently, approximately twenty states have chosen to develop their own requirements that may track or modify the federal requirements, including: California, Connecticut, Georgia, Hawaii, Illinois, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New York, Ohio, Oregon, Tennessee, and Wisconsin.
Recently, New Jersey and California have modified their mini-WARN laws.
On January 21, 2020, New Jersey’s Governor signed the New Jersey WARN Act into law, amending the state’s current mini-WARN law and making New Jersey the first state in the nation to require severance pay for mass layoffs. The law, scheduled to go into effect on July 19, 2020, will make it dramatically more expensive for companies to conduct a large scale reduction in force in New Jersey. Specifically, the amendments revised the New Jersey WARN Act as follows:
- States that a WARN notice will be required upon a layoff of 50 or more employees; regardless of the number of hours worked by each employee (previously employees only counted if they worked a certain number of hours per week).
- Provides that a company is to consider all terminations that it is making in the state, regardless of location (previously there were exclusions based on the employee’s location)
- Increased the WARN notice period from 60 to 90 days advanced notice.
- The most drastic change in the amendments is that severance pay is now guaranteed to terminated workers. Previously, employers were only required to pay employees if the employer failed to provide employees with the proper 60 days advance notice of the layoff. Now all employees are entitled to one week of severance pay for each year they have worked with the company. Furthermore, the severance pay obligation is increased to four weeks of severance pay if the employer fails to provide timely notice of the layoff.
In addition, California previously implemented its version of the mini-WARN with CA-WARN, which has substantial differences from the federal WARN law. CA-WARN applies to employers of 75 persons instead of 100; requires notice when 50 or more employees are laid off in a 30-day period (regardless of the percentage of the workforce) and does not have a “temporary facility closing” exception. In general, under WARN, an employer does not need to give notice if a plant closing is the closing of a temporary facility, or if the closing or mass layoff is the result of the completion of a particular project or undertaking.
However, in light of the COVID-19 crisis, California has temporarily suspended its 60-day notice requirement. On March 17, 2020, California’s Governor issued an executive order, declaring that due to the COVID-19 state of emergency and related rapid changes in workforce needs, certain provisions of the California WARN Act will be temporarily “suspended” on the following conditions:
- Temporary change: The suspension only applies if the below conditions are met and only applies from March 4, 2020, through the end of the current state emergency.
- Notice still required: Employers must still give notice to employees of a layoff, plant closing or relocation that ordinarily would have triggered CA-WARN. However, rather than providing 60 days’ advance notice, employers can instead provide as much advance notice as is practicable, as long as they also provide a brief statement of the basis for reducing the notification period.
- COVID-19-related unforeseen business circumstances must exist: The employment action must be a result of COVID-19-related “business circumstances that were not reasonably foreseeable as of the time that notice would have been required,” e., 60 days before the notice is sent.
- Notice must reference unemployment insurance benefits: The notice must contain a mandated statement regarding unemployment benefits.
Governor Newsom also ordered the California Labor and Workforce Development Agency to provide additional guidance on its implementation.
An important note with these changes is that these are on the state level. Although an employer’s actions may comply with newly revised state level laws, the same actions may still trigger the federal WARN Act or similar laws in other states.
About Harrison Oldham
Harrison grew up in Mansfield, Texas. He attended Texas A&M University for his bachelor’s degree, where he met his wonderful wife, Kelsey. After graduating magna cum laude from Texas A&M, he attended SMU Dedman School of Law, graduating with honors in 2012. Today, Harrison and his wife live in Dallas, Texas with their son, Teddy.
Since graduating from SMU Law, Harrison has worked exclusively in the field of business law. He has spent time in private practice and in-house, working with clients of every size; from single person startups to Fortune 250 companies. Today his practice focuses on serving the diverse needs of businesses and individuals throughout Texas. You can learn more about Harrison by visiting his website, at: http://