In response to expert suggestions of an impending slowdown to the United States economy, many large companies have elected to conduct reductions in force and make other layoffs across their workforces. According to a January 18, 2023 article featured on CNBC, recent reductions in force include the elimination of 18,000 jobs at Amazon, 12,000 jobs at Alphabet (Google’s parent company), 11,000 jobs at Meta (Facebook’s parent company), and 10,000 jobs at Microsoft. Downsizing has not been limited to the Tech Industry. Business Insider recently reported that major companies like Nordstrom, Goldman Sachs, Morgan Stanley, CNN, Re/Max, JP Morgan, Netflix, and even Doordash have reduced headcount. It is important to remember, while the numbers appear to be staggering, in some instances, this amounts to just a small percentages of a company’s overall workforce. Nonetheless, this leaves many employees out of work in difficult times with an uncertain future.
When these types of large-scale events occur, it can be easy for an employee to believe they have no particular rights. That is not always true. In situations where there are “mass layoffs” or “plant closings,” employees may have certain rights under both the Federal and California Worker Adjustment Retraining and Notification Acts (“WARN Act”). While these laws are only applicable under certain circumstances, when they become triggered, they provide a number of short-terms rights for employees as they begin to make their transitions to new jobs.
Mass Layoffs under the WARN Act
Essentially, under the WARN Act, when there is a “mass layoff” or “plant closing” the company must provide those employees who will be affected by the action (as well as state and local government agencies) at least sixty (60) days written notice before such moves are made. This means employees should receive at least sixty (60) days of additional work before losing their jobs or, in the alternative if the move takes effect immediately, sixty (60) days of pay and benefits. If a company does not provide a WARN Notice when required to do so, the company must similarly pay employees sixty (60) days of pay and benefits.
Federal WARN Act
The WARN Act does not apply to every employer or business or in every instance of a layoff. Under the Federal WARN Act, a qualifying employer must have 100 or more employees (excluding part-time workers) or 100 or more employees who work (in total) 4,000 hours a week exclusive of overtime. This is usually calculated on the date the WARN Notice is given. A mass layoff that is not a complete “plant closing” is generally defined as at least 500 employees or a minimum of 33% of the employees at the particular worksite (when there are at least 50 full-time employees who work there). Once a WARN Notice is issued, an employer must retain the affected employees for at least sixty (60) days or provide them their pay and benefits. This may include holiday pay, overtime pay, and benefits.
California WARN Act
The California WARN Act is very similar to its Federal counterpart, but has slightly more restrictive provisions. As one example, the California WARN Act applies to an employer who employs at least 75 employees in the past 12 months rather than the 100 required by the Federal WARN Act. The remedies available to workers whose employer violate either version of the WARN Act are virtually identical.
It is important that employees known their rights under both the California and Federal WARN Acts as they could be the source of at least some relief during an extremely difficult time. If you feel you may be subject to WARN Act protections, but they were not provided, you should immediately contact an employment attorney who can advise you of your rights and remedies including a potential lawsuit on behalf of you and other employees to recover the benefits which were denied to you.
Consult a California Employment Attorney Before Signing a Severance Agreement
Finally, two critical issues that sometimes arises in WARN Act situations when severance pay is offered in exchange for signing a severance agreement. First, before signing any such document, employees should immediately contact an employment attorney to be sure their severance pay effectively represents their statutory WARN rights as any waiver could prohibit further pursuit of those remedies. Second, inclusion in a WARN layoff does not necessarily mean an employee has not been subject to harassment, discrimination, or retaliation which might be actionable and provide an employee greater relief. Thus, it can be critical an employee speaks with an employment attorney as soon as possible before making the decision to sign any severance related document.
The attorneys at Ares Law Group, P.C. have considerable expertise with employment laws that effect California employee including, among others, the WARN Act, wage and hour protections provided by the California Labor Code, and protections against harassment, discrimination and retaliation under the California Fair Employment and Housing Act (“FEHA”). If you have any questions, please feel free to give Ares Law Group a call for a free consultation.