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The speed at which California state, county, and city agencies are making changes to what businesses can be open, what services can be offered, and how they conduct business has been lightning fast. For some, this has resulted in the activation of their business continuity plan, requiring office closures and implementation of a remote workforce approach. For others, it means reduced hours or complete closure for an unspecific period. The impact on individual Orange and Los Angeles County businesses can be challenging, requiring management to reduce employee hours, or even make mass layoffs, to ensure the vitality of the company. Many are surprised to learn that under the California WARN Act, employers who order a mass layoff or close a facility, are required to provide at least 60 days’ notice to employees and state officials. Failure to comply can result in liability for back pay and a penalty of $500 per day. Given current circumstances, the state has provided relief to certain companies. To help clients, prospects, and others understand the changes and impact, JLK Rosenberger has provided a summary below.
California WARN Act Relief
On March 17, 2020, California Governor Gavin Newsom issued Executive Order N-31-20 (the Order), which provides relief for companies needing to make closures or layoffs provided they were unexpected and related to the coronavirus outbreak. This relief applies only to California companies who made mass layoffs, were required to close a facility, or determined relocation was necessary due to a coronavirus event. The Order still requires companies to give written WARN notices as soon as possible and provide information to the state on why a reduced notification period was necessary. There is also a requirement that employers who issue WARN notices must include the following statement, “If you have lost your job or have 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 relief is retroactive to March 4, 2020, and will remain in effect through the end of the emergency. The Order requires the California Labor and Workforce Agency to provide guidance on how relief will be implemented.
The drastic changes imposed on companies as a result of the coronavirus have left many Los Angeles and Orange County business owners with difficult decisions. The good news is there are a number of regulatory and tax relief programs to help you through this time. If you have questions about the information outlined above or need assistance with business continuity issues, JLK Rosenberger can help. For additional information, call us at 949-860-9902 or click here to contact us. We look forward to speaking with you soon.