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All of the following events trigger the notice requirement under federal or state law:
Because California law requires you to give your employees notice of any mass layoff, relocation or termination, if you are considering reduced activity at your workplace, carefully measure your proposed action against these definitions.
Under federal law, a temporary or permanent “plant closing” is the shutdown of a single site of employment or of one or more facilities or operating units within a single site of employment, if the shutdown results in an employment loss for 50 or more employees during any 30-day period.
To determine if there is an employment loss for 50 or more employees, you do not count part-time employees — those who have worked less than six of the last 12 months, or employees who work an average of less than 20 hours a week for that employer.1 These groups, while not counted toward the 50 employees for defining plant closing, are entitled to notice. See WARN Act Notice Content and Recipients.
An employment action that effectively ceases production and stops the work that a unit performs, even if a few employees remain, is a shutdown.2
Under federal law, “employment loss” is:3
Under federal law, a “mass layoff” is a reduction in force that is not the result of a plant closing and that results in an employment loss at a single site of employment during any 30-day period for:
Under state law, a “mass layoff is a layoff during any 30-day period of 50 or more full- or part-time employees who have been employed for at least 6 of the 12 months preceding the date on which notice is required. Under state law, a layoff is separation from a position for lack of funds or lack of work.5
The California law defines “mass layoff” more broadly than the federal law. State law does not specify full-time employees. The state definition of “employee” includes part-time employees. Consequently, a layoff of any 50 or more employees, full-time or part-time, can trigger the state notice requirements. However, to be counted toward the 50 or more employees, the full- or part-time employee must have been employed for at least 6 of the 12 months preceding the date on which notice is required.
The number of employees who are actually employed at the time of a layoff and the number of employees affected trigger the federal WARN Act. An employer on the verge of finalizing the sale of its company cannot avoid obligations under the WARN Act, even if the employer recommends that its employees apply for jobs with the purchasing company. According to the Seventh Circuit Court of Appeals, “the WARN Act does not require employees to take business risks; employees’ entitlements depend on events as they are, rather than as employers hope they will turn out.”6
In Phason v. Meridian Rail Corp., Meridian Rail Corp. made a deal to sell its assets to NAE Nortrak, Inc. Meridian told its employees of the impending sale, then recommended that they apply for jobs with NAE. Eight days after Meridian laid off more than 50 employees, the sale was finalized and NAE hired all but 40 to 45 of the Meridian employees who had been laid off.
The WARN Act requires employers with 100 or more employees to give 60 days’ notice before a layoff of 50 or more employees. Meridian claimed that it did not have to comply with the WARN Act because the layoff affected only 40 to 45 employees who were not eventually hired by NAE. The court disagreed. The law refers to the actual number of employees who were laid off — in this case more than 50 — not the number of employees who get a job soon thereafter.
The federal WARN Act requires notification only when a layoff is more than six months, but the California WARN Act does not specify how long a mass layoff must last to qualify for protections.
However, a recent California court case clarified that employers must follow the California WARN Act’s notice provisions when the layoffs will be for a short period of time.7
In 2014, NASSCO Holdings temporarily laid off some employees due to a business shutdown and informed 90 employees, without notice, that they were not needed at work for three to five weeks effective immediately. The shutdown lasted four to five weeks, after which the employees returned to their original positions.
The employees complained that they did not receive the required mass layoff notice under the California WARN Act. The employer argued that it did not lay off workers but just temporarily furloughed them. The court ruled that temporary layoffs are covered by the California WARN Act for several reasons:
The court did not specify how long a layoff must be to meet the definition of mass layoff under the California WARN Act. But in this specific case, the employer was found to violate the California WARN Act by laying off the workers for about a month without any notice.
Under state law, you must give notice if you have a termination.
Under state law, a “termination” is “the cessation or substantial cessation of industrial or commercial operations.”8 The law does not indicate what qualifies as a substantial cessation of operations. The courts must decide what constitutes a substantial cessation, unless subsequent regulations clarify the issue.
In California, you must give notice if you relocate.9 Under state law, a “relocation” is the removal of all or substantially all industrial or commercial operations to a location that is 100 miles or more away.10
Under federal law, a “relocation” is the transfer of all or part of an employer’s business to a different site and that transfer results in a plant closing or mass layoff.11
Under federal law, an employer need not give notice of a relocation if it offers to transfer the employees to a new site within a reasonable commuting distance and there is no more than a six-month break in employment, or if the employer offers a transfer to employees to a new site anywhere and they accept that offer.12
California law contains specific requirements for the relocation of call centers to foreign countries.
The law applies to California covered establishments that operate a call center, which is defined as a facility or other operation where employees, as their primary function, receive telephone calls or other electronic communication for the purpose of providing customer service or related functions.
When a California employer wants to “move its call center, or one or more facilities or operating units within a call center comprising at least 30 percent of the call center’s or operating unit’s total volume when measured against the average call volume for the previous 12 months, or substantially similar operations to a foreign country,” it must comply with California’s WARN requirements discussed below.13
If the employer is required to provide a WARN notice, the law states that it may provide a single notice of relocation which must include “This notice is for the relocation of a call center” at the top.14
1. 29 U.S.C. 2101 (a)(2) (8)
2. 29 CFR sec. 639.3(b)
3. 29 U.S.C. 2101 (a)(6)
4. 29 U.S.C. 2101(a)(3)
5. Lab. Code sec. 1400.5 (c)(d)
6. Phason v. Meridian Rail Corp., 479 F.3d 527 (7th Cir. 2007)
7. The International Brotherhood of Boilermakers, et al. v. NASSCO Holdings, Inc., 17 Cal.App.5th 1105 (2017), rev. denied
8. Lab. Code sec. 1400(f)
9. Lab. Code sec. 1401
10. Lab. Code sec. 1400(e)
11. 29 CFR sec. 639.3(f)(4)
12. 29 CFR sec. 639.3(f)(3)
13. Lab. Code sec. 1409
14. Lab. Code sec. 1410