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Mass Layoffs may be Coming as the Economy Worsens - What Protections do You Have?

Posted by Caleb A. Miller | Jun 02, 2022 | 0 Comments

By June of 2022, Californians are very aware of the rising prices of gas, food, rent and other basic necessities.  In some areas of California gas has risen as high as 44% since last year alone. With Interest rates increasing and the housing market slowing down, many Californians are predicting another recession. Whether this is true or not is irrelevant as Companies who panic at the added costs of labor, materials and necessities may be considering mass layoffs and your job may be in jeopardy. 

Mass Layoffs. Is There Anything I Can Do to Protect my Job?

Mass Layoffs tend to effect employees who perform more basic or repetitive tasks; or workers in an industry that provides services and goods that are not considered a necessity as consumers will begin to cut back on spending; accelerating the fears of a down economy. Many Employees feel their employer may terminate their employment at any moment and begin to fear for their livelihoods while trying to make a living. However, a mass layoff without an adequate warning is ILLEGAL in many situations in California and there are certain rights you are entitled to before an Employer may do so.  

California's WARN Act. 

To start, the following employees are covered by the WARN act, Labor Code 1400 et seq.; of whom both of the following are true:

  1. The employee has been employed by the employer for at least six (6) of the twelve (12) months preceding the date on which notification would be required; and
  2. The number of employees is seventy-five (75) or more people, or the employer has employed that many at any point within the preceding twelve (12) months.

Relocations, Terminations and Mass Layoffs in California are regulated by Labor Code sections 1400-1408 Generally, “an employer may not order a mass layoff, relocation, or termination at a covered establishment unless, 60 days before the order takes effect, the employer gives written notice of the order” to employees and the Employment Development Department and shall include the notice elements required by the Federal Worker Adjustment and Retraining Notification Act (29 U.S.C. section. 2101 et seq.)  (Labor Code section 1401(a)-(c)). 

A mass layoff is defined as the elimination of fifty (50) or more jobs during any thirty (30)-day period, due to lack of work or lack of funds.

relocation means moving all or substantially all of the commercial or industrial operations at a given location to a new location at least one hundred (100) miles away.

Finally, a termination (plant closure) means the cessation or substantial cessation of industrial or commercial operations. This means the drawdown of operations and the steady cut back of production. 

What does this mean? An Employer cannot surprise their employees with a mass layoff and must provide a 60-day warning before the layoff takes effect. If the employer fails to provide you with adequate notice, you are entitled to back pay and the value of the cost of any benefits the employee may have been entitled to up to a maximum of 60 days or one-half the number of days that the employee was employed by the employer, whichever is smaller. In addition to this back pay, the Employer must pay civil penalties of up to $500 per day that notice was not provided. Better yet, the Employer will be liable for all of your attorney's fees under the California Warn Act. 

Which Employers Does This Apply To?

Employers covered under California WARN Act are those with 75 or more full-time or part-time employees. As under federal WARN, employees must have been employed for at least 6 of the 12 months preceding the date of required notice to be counted.

A plant closing, layoff or relocation of 50 or more employees within a 30-day period, regardless of percentage of workforce, requires notice. Relocation is defined as a move to a different location more than 100 miles away.

My Employer Doesn't Qualify, Do I Still have Protection?

Many employers may relay false information that due to the need for plant closures or other mass terminations there is no possibility for an employer to bring a claim. This is false as under California Labor Code Section 558.1, which took effect Jan. 1, 2016, the owner, director or managing agent of an employer company may be personally liable for wage and hour violations if that person, on behalf of the employer, "violates or causes to be violated" state wage and hour laws. So even if the Company itself is claiming financial hardship, that does not prevent you from bringing a claim against both the Company, and the owner of the Company of these same claims of unpaid wages, missed meal periods, rest periods, and other wage and hour violations. 

What Does the Notice Look Like?

To notify employees, any reasonable method of delivery designed to ensure receipt of the notice at least 60 days before a plant closing or mass layoff is acceptable (e.g., first-class mail or personal delivery with optional signed receipt). In the case of notification directly to affected employees, insertion of a notice into pay envelopes is another viable option; however, a ticketed or preprinted notice regularly included in each employee's paycheck or pay envelope does not meet the requirements.

Among other things, California layoff law requires employers to include the following information within a written mass layoff notice:

  • Details about the layoff, including the site that is closing;
  • A description of the company's future plans for the implicated positions, including whether the layoff is expected to be permanent or temporary;
  • The date that layoffs are scheduled to begin as well as a basic schedule for the layoffs;
  • An overview of the jobs being affected by the layoffs, including job titles and number of workers being let go; and
  • Contact information for a company official who can be reached to provide employees additional information.
Does a WARN Act Compliant Mass Layoff Prevent Me From Bringing My Existing Claims for Discrimination, Harassment or Retaliation? What About Unpaid Wages and Missed Meal and Rest Periods? 

No. The fact that the employer has complied with the California and Federal WARN acts, and is conducting a lawful mass layoff, relocation or termination does not cancel any claims you had against the company that preexisted before receiving notice. A WARN Act compliant action is no defense to the unlawful employment practices you may have been subjected to and it is critical you bring your claim as soon as possible. If you are being subjected to a mass layoff or termination and the Company has not provided adequate notice, or they have but your preexisting claims have not been resolved, contact Miller Wilmers APC, a Los Angeles California based Law Firm to discuss the next steps forward in a scheduled FREE consultation. 

About the Author

Caleb A. Miller

Caleb A. Miller is a Marine Corps Veteran and founder of Miller Wilmers, APC.


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