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California "WARN" Statute Extends Plant Closing Notification to Smaller Employers

  • October 4, 2002

The California "baby WARN" statute requires employers with 75 or more employees to provide 60 days' notice of a mass layoff, relocation or termination affecting 50 or more employees. Governor Davis signed the measure modeled on the federal Worker Adjustment and Retraining Notification Act, or WARN, on September 21, 2002.

California Assembly Bill 2957: Business Closures: New Notice / New Penalties / New UI Tax Liability

Purpose: Precludes employers from ordering a mass layoff, relocation, or termination, as defined, of an industrial or commercial facility employing a prescribed number of people, without first giving 60 days' notice to affected employees and specified government agencies.

Effective Date: January 1, 2003

Coverage: Applies to 1) employers with 75 or more employees; 2) layoffs during any 30-day period affecting 50 or more employees; 3) relocation of all or substantially all of the industrial or commercial operations in a covered establishment to a different location 100 miles or more away.

Exceptions: An employer would not be required to comply with the 60-day notice requirement established by this bill if: (1) the employer is actively seeking capital or business that would enable the employer to avoid or postpone a relocation or termination, and (2) the employer reasonably and in good faith believed that giving the 60 days' notice would preclude the employer from obtaining the capital or business.

Remedies: Provides for civil penalties against an employer who fails to provide the required notices. Gives courts discretion to provide attorney's fees to employees who bring a civil action to enforce the provisions of this bill.

Good Faith Investigation: Gives courts discretion to reduce the amount of an employer's liability if the employer conducted a reasonable investigation in good faith and had reasonable grounds to believe that it was not violating the law.

Consequences: This law imposes duties similar to those under the federal WARN Act, but applies the requirements' provisions to smaller employers and smaller layoffs.

Press release issued by the Office of Governor Davis:

Governor Gray Davis has signed legislation that requires advance notice for workers who are about to be laid off from their jobs.

"When a large company closes its doors or lays off its employees, it can have a devastating impact on the economy and workers alike," Governor Davis said. "Employees should not learn about layoffs or closures by finding locked doors when they show up for work in the morning."

AB 2957, by Assembly member Paul Koretz (D-West Hollywood), requires specified employers to provide a 60-day written notice of mass layoff, relocation, or termination to affected employees, the Employment Development Department, the local workforce investment board, and the chief elected official of each city and county affected. Employers that fail to provide the notice may be liable for back pay, benefits, penalties, attorneys' fees and court costs.

Existing federal law, the Worker Adjustment and Retraining Notification Act, known as the WARN Act, requires employers with 100 or more employees to provide written notice 60 days in advance of a layoff involving 50 or more employees

This measure applies to any industrial or commercial facility that employs 75 or more people. A mass layoff would include any layoff of 50 or more persons. "Employee" is defined to mean a person employed by the employer for at least six of the last 12 months prior to the layoff notice date.

©2002 Jackson Lewis P.C. This material is provided for informational purposes only. It is not intended to constitute legal advice nor does it create a client-lawyer relationship between Jackson Lewis and any recipient. Recipients should consult with counsel before taking any actions based on the information contained within this material. This material may be considered attorney advertising in some jurisdictions. Prior results do not guarantee a similar outcome.

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