Mass Layoffs and Furloughs, Relocations and Shutdowns of Worksites

Layoffs are difficult, especially for employees who lose their income. During times of economic hardship companies often lay off groups of employees, or furlough, or even shut down operations entirely.

Generally, both federal law and California law require employers to provide at least 60-days’ advance written notice to affected employees before a mass layoff or a furlough, a shutdown of operations, or a relocation that affects a worksite takes place.

There are some limited defenses to these requirements. However, when employers fail to follow the law, affected employees are entitled to compensation.

Federal Law

Pursuant to federal law (the “WARN Act”) written notice must be provided to affected employees by a “covered employer” (as defined below) whenever a temporary or permanent shutdown of a single site of employment results in an “employment loss” (as defined below) for 50 or more employees, or results in a “mass layoff” (as defined below).

A “covered employer” is any employer that has 100 or more employees who work more than 20 hours per week.

A “mass layoff” is a reduction in force that is not the result of a plant closing and that results in an employment loss at a single site of employment during any 30-day period for:

• At least 33 percent of full-time employees and at least 50 or more full-time employees; or
• At least 500 full-time employees.

An “employment loss” is:

• An employment termination, other than a termination for cause, voluntary departure or retirement.
• A layoff exceeding six months.
• A reduction in an employee’s work hours of more than 50 percent in each month of any six-month period

California Law

Pursuant to California law (the “Cal-WARN Act”) written notice must be provided to affected employees by a “covered employer” (as defined below) whenever a temporary or permanent shutdown of a single site of employment results in a “mass layoff” (as defined below), a “termination” (as defined below), or a “relocation” (as defined below) for 50 or more employees.

A “covered employer” is any industrial or commercial facility or part thereof that employs or has employed 75 persons within the preceding 12 months.

A “mass layoff” is either a termination from employment or failure to provide work to 50 or more employees.

A “termination” is “the cessation or substantial cessation of industrial or commercial operations.

A “relocation” is the removal of all or substantially all industrial or commercial operations to a location that is 100 miles or more away.

Penalties for Violation of Cal-WARN and WARN Acts

Employers who fail to provide timely written notice to the affected employee may be required to pay back-wages and benefits to the affected employees for each day of the violation, up to a maximum of 60 days. Employees may also be entitled to recover compensation for tips and holiday and vacation pay they would have earned during the time for which the required written notice was not given.

Get the Legal Help You Need

If you are not sure if your employer complied with applicable law, contact us for a free consultation. Our lawyers are prepared to help. To schedule a free initial consultation to see if you have a case, call one of our attorneys at 415-445-0900 or contact us online.