Check WARN Act requirements even for short-term layoffs
In light of the COVID-19 (coronavirus) pandemic, many companies are making difficult decisions about layoffs in the face of an uncertain future. Short-term layoffs don’t trigger the 60-day notice requirement under the federal Worker Adjustment and Retraining Notification Act (WARN Act), but if a layoff extends past six months, it could spell trouble. By “layoff,” we mean employees are temporarily placed on leave due to lack of work but they reasonably expect you’ll recall them when business conditions improve. Generally the WARN Act will apply to a layoff if:
- You employ at least 100 workers;
- At least 50 employees at a single site will be taken off work (within a 90-day window); and
- Your layoff exceeds six months in length.
Even if you anticipate that your company’s layoff will last fewer than six months, it may be wise to provide the WARN Act notice anyway, if there’s any chance it will last that long. Providing a notice unnecessarily is preferable to defending yourself in litigation trying to prove that you really did intend the layoff to be short, when the layoff ends up lasting more than six months. However, there’s an exception which may excuse your company from giving the full 60 days’ notice. This exception applies for unforeseeable business circumstances. All of the economic dislocation and fallout from this pandemic may qualify your company for the exception, but it doesn’t relieve your company from providing the notice, which still must be given as soon as possible after you make a decision that results in a mass layoff (or plant closure) as defined in the WARN Act.
As we previously reported, the California Worker Adjustment and Retraining Notification Act (Cal-WARN Act) has been partially suspended by Governor Newsom. This partial suspension allows companies to give less than 60 days’ notice, but employers still must provide “as much notice as practicable.” California employers aren’t relieved of the notice requirement, although it may be shortened.
Tips: Employers should review the following Vigilant Legal Guides: At a Glance: WARN Act, WARN Act: The Unforeseeable Business Circumstances Exception, and our Model Form, WARN Act letters. Once you’ve reviewed these, contact your Vigilant Law Group employment attorney with any questions you still have.