The WARN Act also applies to “employment losses,” including a reduction in hours of more than 50% per month for six (6) consecutive months. Furloughs of less than six months do not trigger the WARN Act. Exceptions There are two notable exceptions to the WARN Act. They are a natural disaster and unforeseeable business circumstance. The COVID-19 pandemic is seen as generally falling into the category of an unforeseen business circumstance.
California WARN Act Suspended: California has suspended its WARN Act provisions for companies who need to lay employees off or close business units due to the COVID-19 pandemic.
State WARN Laws A number of states also have WARN-like laws that overlay and sometimes expand the federal WARN Act.
California WARN Act
Partial Suspension of WARN California has relaxed its WARN Act requirements for companies that need to lay employees off or close business units due to the COVID-19 pandemic. The Department of Industrial Relations issued guidance following Governor Gavin Newsom’s executive order regarding the WARN Act. Guidance The guidance clarifies that businesses can assert the “unforeseeable business circumstances” exception for mass layoffs and shutdowns triggered by COVID-19. In short, the 60-day notice period is temporarily suspended. This means California employers who would normally be required to make WARN notifications/payments will not be required to do so during the COVID-19 public health emergency. Importantly, employers must establish a causal connection between the mass layoff or shutdown and COVID-19. Additionally, businesses are not completely exempted from all responsibilities. Continuing requirements include: • Give as much notice as practicable (what is “practicable” is based on the unique facts and circumstances of each case) • Provide an explanation in writing to employees and state/local governments as to why full notice cannot be given • Provide the requisite written notices to impacted employees • Expressly notify employees of their eligibility for unemployment insurance benefits
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