When a company goes through restructuring, it often involves laying employees off. In California, known for its particularly strict employment laws, employers need to handle this process carefully to avoid legal issues.
At-will employment in California
California is an at-will employment state, which means employers can terminate employees at any time for almost any reason. Yet, during restructuring, it’s important to be cautious. Even with at-will employment, employers must ensure that their reasons for termination are not based on discrimination, such as age, race, gender, or other protected characteristics under California law.
Following the WARN Act
If you’re planning to lay off a large number of employees, you may need to follow the Worker Adjustment and Retraining Notification (WARN) Act. This law requires employers to give 60 days’ notice before laying off 50 or more employees within a 30-day period. If proper notice isn’t given, employers might face penalties, including paying back wages and benefits to affected employees.
Considering severance packages
While California law does not need employers to offer severance packages, the California Civil Code Section 1542 is relevant when drafting severance agreements. This section allows employees to waive unknown claims against the employer if the waiver is stated in the agreement. Thus, it is crucial to ensure severance agreements include a clear waiver of rights to prevent future legal claims.
Careful planning makes a difference
Laying employees off during a restructuring requires careful planning and following state and federal laws. By understanding the legal requirements and taking the right steps, employers can reduce the risk of legal problems and make the restructuring process smoother for everyone involved.