California continues to experience high unemployment rates after the massive layoff of 17500 employees by Microsoft in 2014. Other companies like Gap announced their plans to close 175 stores in the year 2015. Layoffs cause frustration and distress among employees, especially where it’s done without prior notice. Questions like whether they are entitled to any health benefits, insurance, and retirement benefits linger in their minds. Our discussion will deliberate on layoff laws and rights for employees with a primary focus on California laws.

Employers are not restricted to lay off workers, but employees are entitled to notice prior an impending layoff as stated by the federal Worker Adjustment and Retraining Notification (WARN) Act. However, WARN Act only covers large private companies and excludes state, federal and local government employers if:

• The firm is laying off at least 100 full-time workers (who work 4,000 hours or more cumulatively every week).
• The employer owns an industrial or commercial facility that has at least 75 employees in employment.

Note that WARN Act does not cover all kinds of layoffs or company closing. It qualifies if:

• The mass layoff involves loss of 500 or more full-time jobs or 50-499 full-time employment or if the numbers of workers laid off make up at least 33% of the active force.
• The plant closing results in loss of jobs of 50 or more full-time workers within a 30-day period.

California doesn’t have specific layoff rights for employees, but it expands on the requirements provided by the federal WARN Act. It provides a broader coverage thus protecting the affected employees and their families. California’s mini-WARN applies in the following situations:

• Mass layoff: i.e. laying off at least 50 workers within a period of 30 days.
• Relocation of the closing plant (industrial or commercial plant) with at least 75 workers to a location situated at least 100 miles away.
• The closing of a plant with at least 75 employees.

Notice

Both California mini-WARN and the federal WARN require employers to give a 60-day notice prior layoffs. However, unionized employees don’t need individual notifications rather companies notify their bargaining representatives who inform the affected employees. According to California mini-WARN Act (California Labor Code Section 1401), the elected official of the city and the county as well as the Local Workforce Investment Area also receive the notice.

Employer liability

Any employer who violates the mini-WARN Act is liable to a civil penalty of $500 per day. He is also responsible for any medical expenses incurred by employees that would have been covered under the employee benefit plan.

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There are many factors that make employers to cut down on their employees. In most cases, employers usually conduct layoff if the company is making huge losses. In most states, employment is usually at will. This means that you can decide to quit your job or the company can fire you even without a cause. Although the employer is not prohibited to lay off workers if they are not able to sustain them, there are some cases where employer usually conduct illegal layoff of employees. All employees have the right to be notified in advance by the employer in case the company plans to lay them off. If the employer fails to give proper notice, then employees have the right to sue the company and seek compensation for damages. It is a right that has been given to employees by the Federal Workers Adjustment and Retraining Notification (WARN).

WARN law is implemented in many states including California. However, employers in California are not required to continue giving employees health benefits or pay small severance. It only requires them to give advance notice prior to a layoff.

Discrimination laws

Have you been laid off because of discrimination? The biggest challenge that employees have is being to prove that their layoff was discriminatory. For instance, it is not good enough to say that your layoff was discriminatory if the evidence that you provide is that you were laid off because the company could not afford your high salary. However if you can prove beyond reasonable doubt that you were discriminated, you can file a lawsuit and sue the employer. This is because the federal law prohibits discrimination against employees based on age, sex, race or religion.

Required notice

If a company is planning to conduct massive layoff or if it is planning to close, the employees who will be affected are required to be notified 60 days in advance. If employees are in union, then the employer can communicate to their officials to inform them about the matter. Their representatives will then pass the information to the affected employees. The notice given must comply with both federal and Californian law. This include providing detailed information of the specifics of the layoff. For instance, the employer is supposed specify whether the layoff will be permanent or temporary, the expected date of layoff, whether the employee will have bumping right as well as when they will receive letter of termination.

Employers who conduct illegal layoffs or fail to comply with WARN and federal law may be ordered by the court to compensated affected workers for the damage that they have caused. Employers will also be ordered to pay all court costs and attorney fee that employees incurred when suing the company. Employees who don’t give proper notice to the government can also be fined.

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Introduction

Severance pay, also referred to as a General release, separation agreement, Termination agreement and Exit agreements is money paid to an employee who has been laid off, resigned or fired by an employer. The main purpose of severance payment is for employers to give employees instant-though slightly small- payment for them to surrender their legal abrupt termination rights. On receiving the money, an employee accepts to give up all liability relating to employment law violation that relate to the employment relationship. Such an employee is bound by the agreement not to sue his or her employment and demand for full termination benefits as stipulated by law.

General layoff protection in California

According to Chapter 4, Part 4, under section 1400-1408 of the Californian Labor Code, Workers Adjustment and Retraining Notification (WARN)safeguards employees, communities, their families by stipulating that employers issue a 60-day notice to the concerned employees as well as state and local representatives to before mass layoff or plant closing. The idea is advance notice allows employees and their family members to adjust and transition to the loss of employment by either retraining or acquire new skills to compete favorably in the job market.

So, why do employers like severance agreement?

A work severance agreement works in the favor of the employers. They use exceedingly wide language while drafting the agreement to protect themselves from any future legal liability or lawsuit. When an employer successfully convince you to sign the agreement, and in the process surrender you legal rights, including the right to take any other legal action, he or she saves a lot of money. They avoid paying fines for violation of the any labor law.

Should you sign it?

Even before considering whether you should sign or not, be sure to read it carefully and understand and every item in the agreement. After reading and understanding it, weigh carefully the consequences and its fairness. It is always advisable to consult a seasoned employment attorney. The attorney will help you understand if your rights are violated in any way. With such a valuable knowledge you will be in a better position to decide to accept or reject the severance agreement.

What claims cannot be released?

A California employer cannot ask you to waiver money or benefits relating to;

• Minimum wage
• Overtime
• Unemployment insurance benefits
• Worker’s compensation benefits

Any severance agreement that releases any of the above claims is not enforceable.

Conclusion

A severance agreement as well as the amount you are offered by your employer is totally negotiable. If you feel you deserve more than you are offered, feel free to demand more in exchange of the legal rights you are giving off. Note, though, that deciding whether you should accept or reject Termination agreement is not an easy choice. Take your time. Weight cautiously the advantages of instant payment against the possibility of later on losing a bigger employment lawsuit recovery.

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California unemployment has not subsided as many companies continue to still struggle to recover from the downturn of the economy. The current unemployment rate in California is over 12%.  A recent survey held that 63% of small businesses will not be hiring new employees.

If you are facing a possible layoff or downsizing consider taking the following important three steps.

1.  Secure all performance evaluations, letters of reference, and letters of commendation mentioning landmark projects you worked on, expense reductions you have achieved for your company, or revenue goals you have met or exceeded. In other words, “toot your own horn.” Gathering this information will help you in three ways. First, it will remind you of your own achievements and value, second if you work with your manager to gather this information, it will remind your manager of the value you bring to the organization, and last, this information will be invaluable in interview should the need arise, should you be laid off.

2. If the company is laying off employees and you have been selected for layoff, consider approaching management and offering to take a pay reduction or alternatively to move to another department even if a reduction in pay will ensue. While, this may not “feel good” nevertheless, it may behoove you to maintain full time employment and take a pay reduction instead of facing the ominous task of hunting for a job in this marketplace.

3.  If you are facing layoff, ask for a severance package. Have you ever heard the phrase, “ask and you shall receive?” Certainly, the opposite is true. If you do not ask, certainly you will not receive. Now the question is how much to ask for. You do not want to be unreasonable and you should consider the financial condition of the company. Considering factors such as this, will allow you the greatest chance for acceptance. Also, the company may already have a policy on severance pay based on years employed. Check your employee handbook to determine if this is the case.

If your company elects to provide you with severance pay, you should expect to sign a release that may prohibit you from pursing certain types of labor related claims. It is important to have an experienced California labor law attorney review this release before signing it and most of these agreements state that you have been given the chance to “have an attorney review this agreement”.

California labor law can be complex and before you decide to accept the severance pay and sign anything it is very important to understand what you may be giving up. The cost of having an attorney take a look at the paperwork may even be done as a courtesy or at very little cost.

Keep in mind that your employer is not just being kind to you. Your company most likely wants something in return and that something could be worth tens or even hundreds of thousands of dollars. We have seen many uninformed employees sign away very valuable rights for pennies on the dollar.

Labor law is complex; if you have any questions regarding your employment it is recommended that you contact a California labor law attorney who can help you understand your rights and in many cases will review your situation without charge.

If you have any questions about this article or our blog, feel free to call us at:

Long Beach – (562) 256-1047
Los Angeles – (213) 261-0229
San Francisco – (415) 200-0012
San Diego – (619) 342-1242

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Layoffs in California are an inevitable part of employment, especially for employers that decide to do so in today’s tough economy. From an emotional standpoint, letting go of employees is a very difficult decision. Apart from the dilemma that employers face before selecting which workers are going to be laid off, the chosen employees would have to start from scratch; that is, find new jobs to support themselves and their families.

In California, the task of arriving at an employment decision such as a layoff is already difficult, thanks to the prevailing rules on it. Obviously, failure to abide by those rules may result in employers facing lawsuits from laid-off employees.

Layoff rules in California

Basically, California employees are considered “at will,” which means that they can be terminated at any time and for any reason, as long as there is a legitimate reason for doing so. The same concept applies in layoffs, where employers must adhere to their company policies and that the decision should not be motivated by discrimination. Likewise, salary should not be a deciding factor in subjecting an employee to a layoff.

Moreover, under the Worker Adjustment and Retraining Notification Act (WARN), employers with full-time workers and also planning to lay off at least 50 people must provide “WARN” notices 60 days in their workplaces. Such notices must be posted or issued 60 days before the date of the layoff. However, there is a California version of this law, in which part-timers have been included in the WARN notices. “Mass layoffs” have also been defined as a layoff of at least 50 employees, part-time or full-time, within 30 days.

Another important aspect of California layoffs is on final pay. Laid-off workers have the right to collect their wages, including accumulated vacation pay, right after they have been terminated, as stipulated under the state’s Labor Code. But then, there are exceptions, depending on the type of job industry.

For example, seasonal employees, such as those in the fruit canning and packing industry, must obtain their final pay within 72 hours after they have been laid off. Similarly, those laid off from jobs in the motion picture industry can collect their wages the day after the layoff.

Laid-off employees are also covered by health insurance, thanks to the Consolidated Omnibus Budget Reconciliation Act (COBRA), and its state equivalent, the Cal-COBRA. Said insurance coverage must be given by the employer up to 36 months from the layoff, provided that the employees will take charge of their entire premium.

Seeking legal action in relation to layoffs

While employees are considered “at will,” they are still entitled to their rights to pay and compensation, as well as be terminated under legal grounds. If one is laid off on the basis of his or her race, sex, religion, or any other protective characteristics defined under the existing California employment laws, then it is best that he or she must seek legal assistance from an expert employment discrimination lawyer.

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