California WARN Act Extension to Contract Workers Narrowly Avoided
In a move that may have some employers breathing easier, California governor Gavin Newsom vetoed a bill on Sunday that would have added contracted workers to the current Worker Adjustment and Retraining Notification (WARN) Act requirements.
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Blank Rome L&E lawyer Travis Jang-Busby agreed, adding that the bill, if passed, would have been an “administrative nightmare” for HR and employers to manage, resulting in more WARN issuances than necessary as organizations attempted to avoid violating the rule.
“You would see a mass issuance of notices that may not actually result in termination,” he said. “Because the penalties for one violation are significant … it's $500 a day for each day of the violation, for each employee, so it adds up very quickly.”
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Although the bill wasn’t approved, Jang-Busby said it is still important for HR to be familiar with the “nuanced,” version of the current WARN Act, as non-compliance can be costly. Local and federal WARN Acts have different requirements that must all be complied with, he said, noting that the California WARN Act tends to be comparatively restrictive.
Therefore, if employers are considering a wide-scale reduction in a workforce, it is crucial they consult legal counsel “pretty much from the get-go.” It is important for employers to know who they plan to lay off, and where they are located, said Jang-Busby. Also, taking a close look at the ages of the employees to be laid off is prudent, to be sure of compliance with the federal Older Workers Benefit Protection Act (OWBPA) which stipulates extra conditions for workers over 40.
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"California WARN Act Extension to Contract Workers Narrowly Avoided," by Stacy Thomas was published in Human Resources Director on October 12, 2023.