Federal or State Law Require Your Company to Provide Advance Notice if You Are Planning a Large Layoff Due to COVID-19?

The disruption and uncertainty resulting from the COVID-19 crisis is prompting many companies to consider changes in their work force. ISPA members should consider whether federal or state law requires them to provide advance notice before taking such action.

The Worker Adjustment and Retraining Notification (WARN) Act is a federal law that requires certain employers to provide 60-day notice before laying off 50 or more employees. Layoffs that result from an “unforeseeable circumstance” (which likely includes COVID-19) are exempt from the 60-day notice rule, but the employer still must provide as much notice as is practicable and explain why affected employees are receiving less than 60 days’ notice. Nevertheless, ISPA members that want to rely on this exception should proceed with caution because it is uncertain whether a court would necessarily agree that COVID-19 meets the unforeseeable circumstance exemption, and the U.S. Department of Labor has not issued guidance yet on this subject.

Note also that California, Illinois, Maryland, New Jersey, New York, Tennessee and Wisconsin have their own versions of the WARN Act, which can impose additional obligations on employers.

On a related subject, California’s Governor Gavin Newsome last week issued an executive order (which took retroactive effect beginning March 4, 2020) that suspends the 60-day advance notice requirement if the mass layoff, relocation, or termination is directly attributable to COVID-19-related “business circumstances that were not reasonably foreseeable as of the time that the notice would have been required.” California employers are still required to provide notices containing all information required by the California WARN Act as soon as practicable.

ISPA encourages members that are considering large layoffs to consult with legal counsel to determine whether the federal WARN Act or state versions of this law might impose advance notice and other obligations.