[Update: See our analysis regarding the Department of Labor’s temporary rule issued on April 1, 2020 setting forth regulations regarding employee and employer documentation here.]

By Rick Reyes

It is no easy task for employers to navigate and comply with the new federal requirements set forth in the Families First Coronavirus Response Act (FFCRA).  Specifically, employers now must provide greater rights for leaves of absence under the Emergency Family and Medical Leave Expansion Act (“Emergency FMLA Expansion”) and the Emergency Paid Sick Leave Act (“EPSLA”).  In attempting to quickly address the potent impact that Coronavirus (“COVID-19”) has had on the country’s economy, Congress rapidly enacted the FFCRA.  The problem?  The FFCRA leaves many unanswered questions, and leaves employers guessing as to exactly how to comply and what the employers can and cannot do.  One major source of confusion is exactly what documents, if any, can an employer request prior to granting an employee with a leave of absence.  This article attempts to provide more guidance to employers on this issue.

When May An Employee Take a Leave of Absence Under the Emergency FMLA Expansion?

In short, an employee may take leave of absence when the employee is unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable, due to a “public health emergency.”  The term “public health emergency” means an emergency with respect to COVID-19 declared by a federal, state or local authority.

The employee may take up to 12 weeks of paid leave.

When May An Employee Take a Leave of Absence Under the EPSLA?

The EPLSA provides for six (6) covered reasons under which an employee may take a leave of absence.  These include:

  • The employee is subject to a federal, state or local quarantine or isolation order related to COVID-19;
  • The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  • The employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis;
  • The employee is caring for an individual who is subject to an order as described in No. 1 or has been advised as described in No. 2, above;
  • The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, “due to COVID-19 precautions;”
  • The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

Full time employees may take up to 80 hours of paid leave under the EPSLA.  The amount of leave for part-time employees is the average number of hours worked over a two-week period, unless the employee works a variable schedule, which requires a different calculation.

For a more detailed analysis of the requirements and entitlements under the Emergency FMLA Expansion and the EPSLA, see our previous blog post here.

What Documents Can Employers Require Prior To Authorizing Leave Under EPSLA? 

Prior to today, March 27, 2020, the answer to this question was unclear.  However, earlier this morning, the Department of Labor (“DOL”) has issued further guidance for employers on this specific issue.

The DOL states that if an employee is unable to work or telework due to a qualifying reason related to COVID-19, the employee must provide documentation in support of the reasons for the paid sick leave.  Such documents may include: a copy of the federal, state or local quarantine or isolation order related to COVID-19, or written documentation by a health care provider advising the employee to self-quarantine due to concerns related to COVID-19.

What Documents Can Employers Require Prior To Authorizing Leave Under the Emergency FMLA Expansion?

As briefly mentioned above, an employee may only take leave of absence under the Emergency FMLA Expansion to care for the employee’s son or daughter because of a school closure due to a public health emergency.

Thus, the DOL explains that an employee must provide documentation supporting the need for leave under the Emergency FMLA Expansion.  To meet this requirement, employees may provide their employers with a notice of closure or unavailability from the child’s school, place of care, or child care provider.  This “notice” can include a notice that may have been posted on a government, school or day care website, published in a newspaper, or emailed from either the employee him/herself or an official of the school, place of care, or child care provider.

Another question up in the air was whether the existing certification requirements under the FMLA would continue to stay in place.  The DOL’s guidance confirms that the employee must continue to satisfy the certification requirements under the FMLA if the employee is taking leave for one of the existing qualifying reasons under the FMLA.  Employees must continue to provide medical certifications for the qualifying reasons under the FMLA, if required by the employer.

Recommendations for Employers

While the DOL’s guidelines clarify that an employer can request documentation from an employee prior to taking leave of absence under both the Emergency FMLA Expansion and the EPSLA, there are some issues employer must be mindful of.

First, employers must remember that under EPSLA, there are multiple covered reasons under which an employee may take leave of absence.  Under some of those covered reasons, the required documentation will be easily provided.  For example, when the employee is taking leave to take care of his or her child.  In that scenario, the employee would only need to provide a notice that the school is closed, as discussed above.  However, if the employee requests leave of absence because the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis (No. 2, discussed above), the documentation may not be as easily obtainable.  Given the current circumstances and access limitations, not all employees may be able to get the medical assistance required (such as testing).  Under those circumstances, employers may want to take a more flexible approach and err on the side of providing the leave of absence. We advise employers to approach these issues cautiously and always consult with legal counsel prior to making a determination.

Second, employers should unambiguously advise their employees that, even if the employer is not requesting documentation at the time of granting the leave or the employee does not possess such documentation at that time, the employer reserves the right to request those documents at a later date or when the employee has access to them.  This can potentially deter employees from taking advantage and abusing leaves of absence under the law.  Employers should further advise their employees that a failure to provide the required documentation, either at the time of request or a later date, may result in disciplinary action, up to and including termination.

Lastly, when an employee requesting a leave of absence to take care of his or her, this may give rise to some problematic issues.  It could be possible that employees who may not even have children may want to take advantage of their legal rights to take a leave of absence.  What type of documentation, if any, can be requested from the employee to verify this type of leave is uncertain.  At the minimum, employers should clearly document with the employee the reason the employee is requesting for the leave and have this confirmed in writing by the employee.  This way, at least the reasons are clearly documented, and if it the employer later learns that the reason was not a legitimate reason under the law for paid leave, the employer could then consider disciplinary action at that time.  However, it is recommendation is to err on the side of caution and grant the leave of absence and to consult with counsel on these issues.

As the DOL provides further guidance, we will keep employers up to date.  The full text of the DOL’s guidance can be found here.

[Update:  The Los Angeles City Council is voting tomorrow (March 27, 2020) at 11 am.  Here is the website:

https://ens.lacity.org/clk/councilagendas/clkcouncilagendas3139754_03272020.html

Live broadcast of the City Council meeting will be here: HTTPS://WWW.LACITY.ORG/GOVERNMENT/FOLLOW-MEETINGS/CITY-COUNCIL-MEETINGS

Members of the public who wish to participate in public comment to the Council should call (669) 900-6833 and use Meeting ID No. 459 499 150 and then press #. Press # again when prompted for participant ID.]

As I wrote about earlier this week, Los Angeles City Council is considering a number of ordinances that will require businesses to provide additional paid sick leave or other benefits to employees during the coronavirus pandemic.

The City Council will review and possibly vote on the  new ordinance tomorrow, Friday March 27, 2020 during an emergency meeting.  The ordinance would provide additional paid sick leave to employees who work in the City of Los Angeles.  The ordinance, provides the following:

  • Employees who have worked for an employer from February 2, 2020 to March 4, 2020 would receive at least 80 hours of paid sick leave.
  • Reasons that an employee could use the paid sick leave include:
    • time off because a “public health official or health provider requires or recommends the Employee isolate or self-quarantine to prevent the spread of COVID-19”;
    • the employee takes time off because they are at least 65 years old or has a health condition that puts them at risk;
    • the employee is off of work because the business is closed in response to a public official’s closure recommendation;
    • the employee needs to care for a family member who is not sick, but who public health officials or healthcare providers have required or recommended self-quarantine;
    • the employee needs to provide care to family member whose senior care provider, school, or child care provider is closed.

The full text of the proposed ordinance can be read here.

Businesses impacted by this ordinance should contact City Council and voice their concerns.  In addition, they should contact the City Council to see how they can attend the meeting tomorrow on-line.

Name Email Phone Facebook Twitter Instagram YouTube
Council Member District 1 – Gil Cedillo
Council Member District 2 – Paul Krekorian
Council Member District 3 – Bob Blumenfield
Council Member District 4 – David E. Ryu
Council Member District 5 – Paul Koretz
Council Member District 6 – Nury Martinez
Council Member District 7 – Monica Rodriguez
Council Member District 8 – Marqueece Harris-Dawson
Council Member District 9 – Curren D. Price, Jr.
Council Member District 10 – Herb J. Wesson, Jr.
Council Member District 11 – Mike Bonin
Council Member District 12 – John Lee
Council Member District 13 – Mitch O’Farrell
Council Member District 14 – Jose Huizar
Council Member District 15 – Joe Buscaino

Zaller Law Group is hosting a webinar in connection with the California Restaurant Association and Baker, Burton & Lundy, P.C. discussing options business have to address rent during the coronavirus pandemic. Sean Kennedy, Executive Vice President, Public Affairs from the National Restaurant Association will also provide a brief overview of the status of current federal legislative developments at the start of the webinar.  Click here to register.

Date: Friday, March 27, 2020, 11 a.m. – 12 p.m. PT

Topics will include:

  • General overview of commercial tenant obligations and remedies during the COVID-19 pandemic
  • Temporary closures during the pandemic
  • Abatement or non-payment of rent during closures related to the pandemic
  • Overview of common commercial lease provisions including force majeure, abatement of rent due to damage or casualty, and permitted use
  • Common law contract principles such as frustration of purpose and impossibility
  • Other potential sources of tenant relief including insurance and eviction moratoria

Click here to register: https://attendee.gotowebinar.com/register/2526888133132301836

The Department of Labor published the required posters employers will need to provide to employees under the Families First Coronavirus Response Act:

Posters:

The DOL also provided a FAQ about the Notice:Families First Coronavirus Response Act Notice – Frequently Asked Questions.

The DOL set forth that employers can satisfy the posting requirement for employees who are working at home by emailing or mailing the notice to employees.  The DOL explains:

 

  • Where do I post this notice? Since most of my workforce is teleworking, where do I electronically “post” this notice?Each covered employer must post a notice of the Families First Coronavirus Response Act (FFCRA) requirements in a conspicuous place on its premises. An employer may satisfy this requirement by emailing or direct mailing this notice to employees, or posting this notice on an employee information internal or external website.

 

 

The Families First Cornoavirus Response Act signed by President Trump last week on March 19, 2020 (click here for a detailed analysis on the law) tasked the Department of Labor with issuing regulations clarifying the parameters of the new law.  Today, March 24, 2020, the Department of Labor provided its initial guidance on some common questions under the FFCRA:

1. The FFCRA is effective April 1, 2020.

2. Which workers count towards the 500-employee threshold?

The DOL states that employers should count the following workers to determine if they have 500 or more employees to be exempt from the law:

  • Employees on leave
  • Temporary employees who are jointly employed with another employer (regardless of whether the jointly-employed employees are maintained on only one or the other employer’s payroll)
  • Day laborers supplied by a temporary agency

Independent contractors who meet the classification under the FLSA are not considered employees for purposes of the 500-employee threshold.

3. How about separate companies, when will they be considered joint employers under the FFCRA?

The DOL provides the following explanation:

Typically, a corporation (including its separate establishments or divisions) is considered to be a single employer and its employees must each be counted towards the 500-employee threshold. Where a corporation has an ownership interest in another corporation, the two corporations are separate employers unless they are joint employers under the FLSA with respect to certain employees. If two entities are found to be joint employers, all of their common employees must be counted in determining whether paid sick leave must be provided under the Emergency Paid Sick Leave Act and expanded family and medical leave must be provided under the Emergency Family and Medical Leave Expansion Act.

In general, two or more entities are separate employers unless they meet the integrated employer test under the Family and Medical Leave Act of 1993 (FMLA). If two entities are an integrated employer under the FMLA, then employees of all entities making up the integrated employer will be counted in determining employer coverage for purposes of expanded family and medical leave under the Emergency Family and Medical Leave Expansion Act.

4. How do companies with fewer than 50 employees qualify for an exemption from the law?

This is still a bit uncertain.  The DOL instructs employers to “document why your business with fewer than 50 employees meets the criteria set forth by the Department.”  However, further details about the exemptions will be provided in forthcoming regulations.  Currently, the DOL does not want any employers sending materials seeking this exemption.

Hopefully we will have further clarifying regulations published by the DOL this week.

Los Angeles employers, like every other business across the state and the country have been devastated during the near-economic collapse brought on by the coronavirus epidemic.  However, now Los Angeles City is looking to add even more burdens on businesses looking for ways to stay in business.

The City of Los Angeles is considering two emergency measures, 72J and 73KK that will restrict businesses’ ability .

Motion 72J provides for the following:

Cities like Philadelphia have also adopted the policy of just cause for laying off workers, in which employers must show a bona fide reason to terminate employees. Los Angeles should pursue a similar policy.

In addition, the City should require employers to provide worker recall rights, in which laid-off workers have right of first refusal to return to jobs once businesses reopen.

Lastly, the City should pursue a worker retention policy in the case of bankruptcy or transfer of ownership. As some businesses declare bankruptcy and transition to alternate owners, the new owners should be required to retain the same employees. This is particularly of concern in the hospitality and tourism industries.

The motion asked the City Attorney to draft an emergency ordinance that would apply retro-actively to March 1, 2020 that would only permit employers to terminate an employee for “just cause.”  Employers could only terminate employees in order of seniority.  In addition, if a company takes over ownership of a prior company, the new company would be required to give preference to the employees previously employed at the same worksite in order of seniority.  Finally, the motion would require employers to permit employees to take a total of 15 one-minute breaks every 4 hours to wash their hands.

Motion 72KK seeks to have the City to establish regulatory guidelines for hospitality workers requiring:

  • Any layoffs could only be done by seniority;
  • Re-hiring employees could only be by seniority;
  • Require “just cause” terminations; and
  • “worker retention”

I’m not exactly clear what the “worker retention” prevision envisions, but I expect that it would prohibit employers from terminating employees and forcing them to keep employees on the payroll even if the company cannot afford to do so.

To the extent any businesses in Los Angeles survive the coronavirus shutdown, if any of these measures pass, it will have the effect of eliminating these businesses.

Businesses affected by these measures, should they pass, should contact LA City Council members to express their concerns:

Councilmember Gil Cedillo, CD1
gilbert.cedillo@lacity.org; 213-434-4054

Councilmember Paul Krekorian, CD2
paul.krekorian@lacity.org; 213-473-7002

Councilmember Bob Blumenfield, CD3
councilmember.blumenfield@lacity.org; 213-473-7003

Councilmember David Ryu, CD 4
cd4.issues@lacity.org; 213-473-7004

Councilmember Paul Koretz, CD5
paul.koretz@lacity.org; 213-473-7005

Council President Nury Martinez, CD6
councilmember.martinez@lacity.org; 213-473-7006

Councilwoman Monica Rodriguez, CD 7
councilmember.rodriguez@lacity.org; 213-473-7007

Councilmember Marqueece Harris-Dawson, CD 8
councilmember.harris-dawson@lacity.org ; 213-473-7008

Councilmember Curren Price, Jr., CD 9
councilmember.price@lacity.org; 213-473-7009

Councilmember Herb Wesson, CD 10
herb.wesson@lacity.org; 213-473-7010

Councilmember Mike Bonin, CD 11
councilmember.bonin@lacity.org; 213-473-7011

Councilmember John Lee, CD 12
councilmember.lee@lacity.org; 213-473-7012

Councilmember Mitch O’Farrell, CD 13
councilmember.ofarrell@lacity.org; 213-473-7013

Councilmember Jose Huizar, CD 14
councilmember.huizar@lacity.org; 213-473-7014

Councilmember Joe Buscaino, CD 15
councilmember.buscaino@lacity.org; 213-473-7015

On Monday, March 23rd, we are co-hosting a webinar with the California Restaurant Association to address employment related questions for restaurants operating in California. We just got off a planning call this morning, and the CRA has encouraged any other employers who want to participate in the webinar to do so. 

Register here: https://register.gotowebinar.com/register/5905742340738284045

The webinar will feature the following speakers:

  • Jot Condi – President and CEO of the California Restaurant Association
  • Matt Sutton – Senior Vice President, Government Affairs + Public Policy
  • Jon Ross – KP Public Affairs
  • Anne McWilliams – attorney at Zaller Law Group
  • Michael Thompson – attorney at Zaller Law Group
  • I’ll be participating as well

Join us from 11 AM – 12 PM PDT as we discuss how to approach and deal with these Coronavirus employment related issues as they arise.

There is a capacity limit of 500 attendees with our software, and based on current subscriptions we may hit this limit.  But please bear with us, and we will likely be having additional webinars throughout the week – subscribe to the blog (on right hand side of the blog) to receive updates and invitations for future webinars.

The topics we plan on discussing include:

  • Overview of the California Restaurant Association’s involvement and understanding of current state of affairs with state authorities
  • General overview of employer obligations under California law
  • Federal bailout plans being discussed
  • Families First Coronavirus Response Act – what we understand about the law at this point
  • Temporary and permanent closures – potential WARN notice requirements relief provided by Governor Newsom this past week
  • Communication strategies with employees regarding temporary closures and suspension in work
  • Families First Coronavirus Response Act – what we understand about the law at this point
  • Employer obligations created by school closures
  • Employer obligations if employees are fearful of coming to work

On March 19, 2020, Governor Newsom issued an Executive Order that required all people living in California to stay at home:

To protect public health, I as State Public Health Officer and Director of the California Department of Public Health order all individuals living in the State of California to stay home or at their place of residence except as needed to maintain continuity of operations of the federal critical infrastructure sectors, as outlined at:

https://www.cisa.gov/identifying-critical-infrastructure-during-covid-19

What is a critical infrastructure sector, and which businesses fall into these categories?

The Cybersecurity and Infrastructure Security Agency’s (CISA) website sets forth critical infrastructure sectors, but is not exactly clear on which types of businesses it covers:

This document gives guidance to state, local, tribal, and territorial jurisdictions and the private sector on defining essential critical infrastructure workers. Promoting the ability of such workers to continue to work during periods of community restriction, access management, social distancing, or closure orders/directives is crucial to community resilience and continuity of essential functions.

The CISA lists the following sectors as essential critical infrastructure:

Chemical Sector

Commercial Facilities Sector

Communications Sector

Critical Manufacturing Sector

Dams Sector

Defense Industrial Base Sector

Emergency Services Sector

Energy Sector

Financial Services Sector

Food and Agriculture Sector

Government Facilities Sector

Healthcare and Public Health Sector

Information Technology Sector

Nuclear Reactors, Materials, and Waste Sector

Transportation Systems Sector

Water and Wastewater Systems Sector

 

The California COVID-19 response website provides a very clear explanation of which businesses are considered essential services and can remain open during the stay-at-home order:

What can I do? What’s open?

Essential services will remain open, such as:

  • Gas stations
  • Pharmacies
  • Food: Grocery stores, farmers markets, food banks, convenience stores, take-out and delivery restaurants
  • Banks
  • Laundromats/laundry services
  • Essential state and local government functions will also remain open, including law enforcement and offices that provide government programs and services.

What’s closed?

  • Dine-in restaurants
  • Bars and nightclubs
  • Entertainment venues
  • Gyms and fitness studios
  • Public events and gatherings
  • Convention Centers
  • Hair and nail salons

If your business operates on one of the exempt sectors, there is no need to obtain a letter to continue to operate from the government.  Continue to operate while still complying with the CDC, OSHA and other guidelines about safe operations (links to useful resources on this topic can be found at our prior post here).

By Anne McWilliams

As a reminder, our firm is operating and assisting employers across the state of California during these unprecedented times.  Please contact any of our attorneys to discuss any specific questions.  Here are some useful resources for California employers to keep up-to-date on the quickly developing issues here in California and across the nation:

Office of Governor Gavin Newsom

  1. Executive Order Published: March 12, 2020: https://www.gov.ca.gov/2020/03/12/governor-newsom-issues-new-executive-order-further-enhancing-state-and-local-governments-ability-to-respond-to-covid-19-pandemic/
    • Directs Californians to follow public health directives including canceling large gatherings more than 250 people
    • Order removes waiting period for unemployment and disability insurance for Californians who lose work as a result of the COVID-19 outbreak
    • Readies state to commandeer hotels & medical facilities to isolate & treat COVID-19 patients
    • Allows local and state legislative bodies to hold meetings via conference calls while still meeting state transparency requirements
  1. California Stay At Home Order Published March 19, 2020: https://www.gov.ca.gov/2020/03/19/governor-gavin-newsom-issues-stay-at-home-order/

U.S. Congress

  1. Families First Coronavirus Response Act: https://www.congress.gov/bill/116th-congress/house-bill/6201/text
  2. Zaller Law Group article on what employers need to know about the new law:

https://www.californiaemploymentlawreport.com/2020/03/families-first-coronavirus-response-act-enacted-by-the-president-what-employers-need-to-know/

California Employment Development Department

 Unemployment Insurance: edd.ca.gov/unemployment

  1. EDD FAQs: https://www.edd.ca.gov/about_edd/coronavirus-2019.htm
  2. Employers experiencing a hardship as a result of COVID-19 may request up to a 60-day extension of time from the EDD to file their state payroll reports and/or deposit state payroll taxes without penalty or interest. A written request for extension must be received within 60 days from the original delinquent date of the payment or return.

For questions, employers may call the EDD Taxpayer Assistance Center.

Toll-free from the U.S. or Canada: 1-888-745-3886

Hearing impaired (TTY): 1-800-547-9565

Outside the U.S. or Canada: 1-916-464-3502

  1. Rapid Response Team: Employers planning a closure or major layoffs as a result of the coronavirus can get help through the Rapid Response program. Rapid Response teams will meet with you to discuss your needs, help avert potential layoffs, and provide immediate on-site services to assist workers facing job losses. For more information, refer to the https://www.edd.ca.gov/pdf_pub_ctr/de8714rrb.pdf or contact your local America’s Job Center of CaliforniaSM

California Department of Public Health – COVID-19 Daily Updates

https://www.cdph.ca.gov/Programs/CID/DCDC/Pages/Immunization/ncov2019.aspx

U.S. Department of Labor – OSHA – COVID-19

https://www.osha.gov/SLTC/covid-19/standards.html

California Labor Commissioner FAQs – COVID-19

 https://www.dir.ca.gov/dlse/2019-Novel-Coronavirus.htm

California Labor & Workplace Development Agency – COVID-19 Resources for Employers and Workers

https://www.labor.ca.gov/coronavirus2019/

Centers for Disease Control and Prevention – COVID-19

 https://www.cdc.gov/niosh/emres/2019_ncov.html

EEOC – What You Should Know About the ADA, the Rehabilitation Act, and COVID-19

 https://www.eeoc.gov/eeoc/newsroom/wysk/wysk_ada_rehabilitaion_act_coronavirus.cfm

California State Franchise Board – tax relief available to California taxpayers affected by COVID-19

https://www.ftb.ca.gov/

U.S. Small Business Administration –  COVID-19: Disaster Assistance and SBA Loan Information

 https://www.sba.gov/funding-programs/disaster-assistance

California State Treasurer’s Office – California Capital Access Program for Small Business (CalCAP SB or Program)

https://www.treasurer.ca.gov/cpcfa/calcap/sb/index.asp

By Michael Thompson

With many restaurants forced to close and numerous other businesses facing the prospect of laying off workers in response to the economic fallout from COVID-19, employers have to give careful attention to potential notice obligations under the federal WARN Act and its state equivalent, Cal-WARN.  WARN and Cal-WARN require employers to give 60-day advance notice to employees and government officials of certain closures and layoffs, with back pay and civil penalties for failing to give adequate notice.

Much of the focus had been on Cal-WARN because that statute lacked many of the relevant exceptions contained in the federal WARN Act which might be applicable with COVID-19.  However, on March 17, Governor Gavin Newsom signed an Executive Order implementing important temporary modifications to Cal-WARN to assist employers in the current crisis.

Here is what you need to know.

What is WARN?

The federal Worker Adjustment and Retraining Notification Act applies to employers of 100 or more full-time employees (or 100 full-time and part-time employees who work a total of 4,000 non-overtime hours per week).  A covered employer must give 60-days notice to affected employees and specified government officials before it: (i) shuts down an employment site that causes employment loss for 50 or more full-time employees; (ii) conducts a layoff that effects 50 or more employees and 33% or more of the total workforce at a single location; or (iii) lays off 500 or more employees at a single location.

Potentially relevant to COVID-19 layoffs and closures, WARN has several exceptions.  WARN does not apply to layoffs lasting less than 6 months.  Nor does WARN apply to closures or layoffs resulting from a “natural disaster.”  Finally, an employer could give less than 60 days notice in the case of a closure or layoff resulting from “business circumstances that were not reasonably foreseeable.”

What is Cal-WARN?

The California version of WARN operates similarly, but with crucial differences.  Cal-WARN applies to an employer who has employed 75 or more persons, including part-time employees, at a single industrial or commercial facility (called a “covered establishment”) within the preceding 12 months.  An employer has to give 60-days notice before (1) terminating operations at the covered establishment; (2) relocating the covered establishment’s operations more than 100 miles; or (3) laying off 50 or more employees at the covered establishment in a 30-day period.  For an employee to count as part of the 50-employee threshold, that person must have worked for the employer for at least 6 of the preceding 12 months.

Several features of Cal-WARN are less employer-friendly in the COVID-19 context.  While WARN only applied to layoffs exceeding 6 months, Cal-WARN applies to layoffs of any duration. As such, employers must comply with Cal-WARN even for a short-term layoff.  Cal-WARN has an exception for “physical calamity or act of war,” but it is uncertain whether a pandemic would qualify as a physical calamity.  Prior to the Governor’s Executive Order, Cal-WARN had no express exception for unforeseen business circumstances.

What does the Executive Order Change About Cal-WARN

Governor Newsom’s Executive Order, which applies from March 4, 2020, through the end of the declared State of Emergency, suspends the 60-day notice requirement of Cal-WARN for employers who meet certain conditions:

  1. The employer gives the required notices to the affected employees, the Employment Development Department, the local workforce investment board, and the chief elected official of each city and county government within which the termination, relocation, or mass layoff occurs;
  2. The employer gives as much notice as practicable and includes a brief statement on the basis for reducing the notification period;
  3. The termination, relocation, or layoff is caused by COVID-19-related business circumstances that were not reasonably foreseeable at the time notice would have been required (e., 60 days before); and
  4. For notices given after March 17, in addition to the usual contents of the notice, the employer must include the following statement: “If you have lost your job or been laid off temporarily, you may be eligible for Unemployment Insurance (UI). More information on UI and other resources available for workers is available at labor.ca.gov/coronavirus2019.”

The Executive Order directs the Labor and Workforce Development Agency to provide guidance for implementing these requirements.

Conclusion

The Executive Order does not completely suspend or waive Cal-WARN; rather, it provides a mechanism in line with the federal WARN Act that gives some relief to employers facing unforeseen business circumstances.  Employers must continue to evaluate potential obligations under both WARN and Cal-WARN.  Given the significant penalties for non-compliance, employers faced with closing a location or laying off employees (even for short periods) should consult legal counsel.