California notice to employee as to change in relationship: Requirements, legal steps, penalties, and sample notice

This article outlines California’s notice rules for changes in employment status and the steps employers must follow. It also covers required details, timing, penalties, and includes a sample notice for practical use.

By Brad Nakase, Attorney

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Table of Contents

Introduction

1. Put it on paper

2. Provide the necessary details

3. Send a copy of the notification right away

4. Be aware of the repercussions of noncompliance

Sample Letter

Introduction

A change in an employee’s relationship with the business is subject to various restrictions under California law. Such situations are covered under Section 1089 of the Unemployment Insurance Code. It requires employers to issue a Notice to Employee as to Change in Relationship.

These are four things that all employers in California should be aware of.

1. Put it on paper

Employees are often fired, laid off, granted a leave of absence, or have their status changed from worker to independent contractor. California law mandates that employers provide written notice to employees of a change in the relationship. In case a worker leaves, they are promoted or demoted, their job is suspended due to a trade dispute, or their job or their place of work is changed, then they are not required to provide written notice.

The federal law provides that the company should put in writing the change of workforce in certain situations, as the total number of the workforce reduces significantly, even though the California law does not.

2. Provide the necessary details

Every Notice to Employee as to Change in Relationship must include specific information. There are certain standards in California regarding the information that must be provided in any notification of a relationship change. These specifications include: (1) the employer’s name; (2) the employee’s name; (3) the employee’s social security number; (4) whether the event in question was a layoff, discharge, leave of absence, or shift in classification from employee to freelance contractor; and (5) the date of action.

Interestingly, it is not necessary for the notice to indicate whether the release was due to a reason or not.

3. Send a copy of the notification right away

According to California law, Notice to Employee as to Change in Relationship must be made “immediately” and not after the date on which the employee’s status changes. The safest course of action is to personally provide the employee with a copy of the notification at the point of the employment decision, even if California law doesn’t require a specific service method. The notification must be sent to the worker by the start date of the shift in employment status if this is not feasible or if mail is the chosen method of delivery.

4. Be aware of the repercussions of noncompliance

Failing to provide a proper Notice to Employee as to Change in Relationship can have consequences. Section 1089 of the California Unemployment Insurance Code makes it a crime to violate the state’s notice requirements.

Sample Letter

Notice to Employee as to Change in Relationship

Date: [Insert]

To: [Employee Name]
Address: [Employee Address]

Hi [Employee Name],

This is to let you know that there’s been a change in your employment status with [Company Name], effective [Effective Date].

Your status has been updated as follows:
☐ Terminated ☐ Laid Off ☐ Leave of Absence ☐ Other: [Specify]

Reason: [Brief note – for example, “project completed,” “department changes,” or “employee resignation.”]

We are giving this written notice as stipulated by the California Unemployment Insurance Code, Section 1089. In case you need further information about the unemployment benefits or any other programs available, refer directly to the Employment Development Department (EDD).

Best regards,
[Name of Authorized Representative]
[Title]
[Company Name]
[Company Address]
[Phone / Email]

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California notice to employee as to change in relationship: Requirements, legal steps, penalties, and sample notice

Introduction

1. Put it on paper

2. Provide the necessary details

3. Send a copy of the notification right away

4. Be aware of the repercussions of noncompliance

Sample Letter

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