I am considering a temporary layoff or furlough, should I provide workers with a notice under the WARN Act?
If the temporary layoff is planned to last more than 6 months, then an employer has to give notice as with the WARN Act.
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If the temporary layoff unexpectedly needs to be extended longer than 6 months, then unless it meets the following conditions, it could violate the WARN Act:
- The extension is due to unforeseeable business circumstances that a reasonable person could not have seen at the time of the layoff.
- The employer gives notice when they realize the extension is necessary.
As an employer, the best practice is to give notice of the extension when it becomes evident. The WARN Act counts a furlough or layoff of over 6 months as a job loss from the effective date of the furlough or layoff.
If WARN Act action is brought against the employer, then the employer must prove the business circumstances were unforeseeable at the time of the decision.
Is it possible to claim an exception to the WARN Act due to Covid-19?
The WARN Act provides the following exception to 60-days’ notice for unforeseeable business circumstances. The unforeseeable business circumstances must be caused by a dramatic, sudden, and unexpected even outside of the employer’s control. This includes a client suddenly cancelling a major contract or an unexpected economic downturn.
Therefore, this exception applies to Covid-19, provided that the employer:
- Gives as much notice as possible and
- Includes a brief statement of their reasons for giving less than the required WARN notice.
The employer needs to ensure they can prove that the impact of Covid-19 was unforeseeable for their business and that it directly caused the mass layoff or plant closure. As WARN Act cases are tried on a case-by-case basis, they need to provide evidence there was no intentional violation.
Will I receive a letter from the Department of Labor stating that I have complied with the WARN Act?
No, because the WARN Act is enforced by the U.S. District Court in private legal action, compliance is only investigated once the action is filed. The Department of Labor’s only role is to provide information about the WARN Act, and this information is not binding on courts. It is best to seek legal assistance from an employment lawyer who can ensure your business complies with the WARN Act. They can advise based on precedent and current interpretation of the WARN Act.
Can the Department of Labor provide statistics on the number of WARN Notices filed or copies of them? Do the states receive this information?
No, the Department of Labor does not have this information. Some states do publish examples of WARN Notices on their website, but this is optional, so not all states do so. If you cannot find this information online, reach out to the State or the State Rapid Response Coordinators.
Legal Reference
Legal Reference
Legislation, Interpretation
The California Worker Adjustment and Retraining Notification Act, Lab. Code, § 1400 et seq., defines a “layoff” to mean a separation from a position for lack of funds or lack of work. Lab. Code, § 1400, subd. (c). Under its plain meaning, “separation” means an action of moving apart, and does not contain a temporal component. Under a commonsense understanding, a separation can be permanent or it can be temporary. Thus, the fact that the work stoppage was temporary does not logically take the action outside the scope of the statutory duty. This conclusion is bolstered by the statutory context in which the word “separation” appears. The Legislature used the phrase “from a position” immediately after the word “separation.” § 1400, subd. (c). The concept of being separated from a position does not suggest a requirement that the employment relationship be severed. The “separation from the position” definition does not suggest a severance from the employment relationship must occur before the notice duty triggers. Instead, it encompasses a temporary job loss, even if some form of the employment relationship continues and the employees are given a return date. When viewing the plain meaning of the statutory language, there does not appear to be any permanency requirement contained in the Act’s “layoff” or “mass layoff” terms. § 1400, subds. (c), (d). The Internat. Brotherhood of Boilermakers, etc. v. NASSCO Holdings Inc., 17 Cal. App. 5th 1105
Legislation, Interpretation
The California Worker Adjustment and Retraining Notification Act, Lab. Code, § 1400 et seq., does not state a separation must occur for a specified time period, and there are no statutory grounds for determining the scope of such a proposed rule. Although an employer may view a five-week break as minimal, a worker who is living paycheck-to-paycheck may not. The California Legislature did not include the federal Worker Adjustment and Retraining Notification Act’s rule that the notification duty is triggered only when the layoff is for more than six months. Given this omission, there is no reasonable basis to interpret the statute to mean a four- or five-week layoff does not constitute a separation from position, but a six- or seven-month layoff does. The Internat. Brotherhood of Boilermakers, etc. v. NASSCO Holdings Inc., 17 Cal. App. 5th 1105
Legislation, Interpretation
In addition to lowering the threshold numbers for triggering the required notice under the California Worker Adjustment and Retraining Notification Act, Lab. Code, § 1400 et seq., the California Legislature changed the language used in the federal Worker Adjustment and Retraining Notification Act’s definition of a “mass layoff.” It is presumed the California Legislature did not intend to adopt the exact same definition of a “mass layoff.” By using different words, it is reasonable to conclude the California Legislature intended some change from the federal law. The Internat. Brotherhood of Boilermakers, etc. v. NASSCO Holdings Inc., 17 Cal. App. 5th 1105