March 18th, 2020
Are Layoffs and Closures Caused by COVID-19 Exempt from WARN Act Notices?
With the news of the spread of COVID-19 changing faster than any of us can keep up with, one of the many questions facing employers is: What are their obligations to employees if they have to shut down workplaces temporarily, or permanently, as a result of the COVID-19 outbreak. Whether the shut-down is due to overall health concerns or because of an unexpected downturn in business caused by this unprecedented global pandemic, there are federal and state notice requirements that, if possible, an employer must provide to its employees as well as governmental agencies. These Workers Adjustment Retraining Notification (WARN) laws can be technical to navigate, but the failure to follow them can subject an employer to liability including civil penalties and potential lawsuits. Below is a summary of the general requirements of the Federal, California and New York WARN Acts:
Both the federal and New York WARN Acts have exceptions to their notice requirements if the closure or layoff was due to “unforeseeable business circumstances” or "natural disaster." While California, on the other hand, exempts from its notice requirements certain industries (such as the motion picture industry and seasonal employment) where the employees were hired with the understanding the work was limited in duration, it also has an exception for closures that are due to “physical calamity.” Whether closures due to COVID-19 qualify as exceptions for an “unforeseeable business circumstance”, “physical calamity”, or “natural disaster” is unknown. However, all three laws apply only when an employer orders a mass-layoff or plant shuttering, not when the closing is at the direction of the federal, state, or local government.
Given all the uncertainties during this time, the best practice for employers facing mass layoffs or plant closures is to give employees as much notice of a lay-off or closure as soon as reasonably possible. Please contact Tricia Legittino at (310) 579 9632 or tlegittino@fkks.com, Wendy Stryker at (212) 705 4838 or wstryker@fkks.com, or any other member of the Frankfurt Kurnit Employment Compliance, Training & Litigation Group to help guide you through the notice requirements of the federal or state WARN Acts, or if you have any questions about these or other employment laws.
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