Lesson Last Updated: October 16, 2025

Lesson Highlights

We’ve already discussed one form of involuntary terminations: the fire. So in this lesson, we’re going to discuss the other form of involuntary termination: the layoff. They’re similar in that the employee is being let go (not resigning), but there are some specific rules that apply to layoffs that don’t necessarily apply to firings. So let’s make sure we have those rules straight!

In this lesson, we'll cover the following topics:

• Advance notice of a layoff;
• The basic documents you need to provide to an employee when they've been laid off; and
• Revisiting final pay.

Advance Notice of a Layoff

First and foremost, it’s important to understand that being laid off refers to an exit necessitated by some sort of business reason, such as downsizing, corporate restructuring, or the elimination of the employee’s position. Under California law, the actual definition of layoff is, “a separation from a position for lack of funds or lack of work.” [1] 

Here’s the tricky part: employers are required to give advance notice of a layoff in certain situations. There are two main laws for California employers to be aware of: the federal Worker Adjustment and Retraining Notification (“WARN”) Act and California’s "mini-WARN" law.

Employers are considered “covered employers” under the federal WARN Act if they have:

1. At least 100 full-time employees; OR 
2. At least 100 employees who work a combined 4,000 hours or more per week.

For the purposes of this law, full-time employees are defined as those who work at least twenty (20) hours per week and have been employed for at least six (6) of the twelve (12) months ending on the date when notice must be given. 

If an employer is considered a covered employer, then they will need to give advance notice of plant closings and mass layoffs. A plant closing is defined as, “the shutdown of a single site of employment, or at least one (1) facility or operating unit within a single site of employment, which results in job loss for fifty (50) or more full-time employees during any thirty (30) day period.” And similarly, a mass layoff is defined as, “a reduction in force resulting in job loss at a single site of employment for 500 or more full-time employees, or for 50 to 499 full-time employees, if the number of employees laid off makes up at least 33% of the employer's active workforce.” [2]

As you can imagine, the federal WARN Act’s requirements do not usually apply to our clients, being that we work with small employers. However, you may hear about the WARN Act at one point or another, so it’s a good idea to at least have a basic understanding of what this law is! 

If a covered employer is required under the federal WARN Act to give advance notice, this usually means at least sixty (60) days’ notice, unless an exception under the law applies. [3]

California’s mini-WARN law was enacted to provide similar protections to employees that work for employers that would not be considered covered employers under federal law. Sound familiar? That’s how quite a few California laws came to be! 

California's mini-WARN defines a “covered establishment” (which is the same as a covered employer), as "any industrial or commercial facility or part thereof that employs, or has employed within the preceding twelve (12) months, seventy-five (75) or more persons.” [1] This brings the threshold down from the federal level by twenty-five (25) employees, which can make all the difference! 

If an employer is considered a covered establishment, then they would be required to give advance notice of any of the following situations:

1. A mass layoff, defined for the purposes of this law as job loss for at least fifty (50) employees in a thirty (30) day period; 
2. The closing of an industrial or commercial facility with at least seventy-five (75) employees; OR
3. The relocation of an industrial or commercial facility with at least seventy-five (75) employees to a location at least 100 miles away. [4]

If any of those situations will occur, employees who will lose their jobs are entitled to notice sixty (60) days in advance, just like the federal law requires. 

The notice to be provided is required is the same under federal and California law, so if an employer is subject to the federal WARN Act and they provide notice under that law, they will automatically also have met their California requirement for providing notice to employees. [4] However, notice must also be given to the Local Workforce Development Board, as well as the chief elected official of each city and county government within which the termination, relocation or mass layoff occurs. [4] So just keep that in mind!

The notice to employees must provide specified information about the planned layoffs, including whether they are expected to be temporary or permanent, the expected date when the layoffs will begin and when the employee will receive a termination letter, and whether the employee will have “bumping” rights (or different rights based on accrued seniority with the employer). [5]

Just like with federal law, there are exceptions to California’s mini-WARN law. Specifically, the exceptions are:

• When the closing or layoff is the result of the completion of a particular project or undertaking of an employer subject to Wage Orders 11, 12 or 16, regulating the Motion Picture Industry, or Construction, Drilling, Logging and Mining Industries, and the employees were hired with the understanding that their employment was limited to the duration of that project or undertaking;
• When the employees are involved in seasonal employment where the employees were hired with the understanding that their employment was seasonal and temporary; [1]
• Where mass layoff, relocation or plant closure is necessitated by a physical calamity or act of war; [4] OR
• Where, under multiple and specific conditions, the employer submits documents to the Department of Industrial Relations (“DIR”) and the DIR determines that the employer was actively seeking capital or business, and a WARN notice would have precluded the employer from obtaining the capital or business. This particular exception has more caveats to it, so it’s best not to rely on this (or frankly, any of these exceptions) without first speaking to an attorney that is familiar with your situation.

Penalties for non-compliance related to each WARN law range from civil penalties of $500 per day for each employee, for each day of violation, to back pay to affected employees, and even to medical expenses that would have been covered under an employee benefit plan. Yikes! So if you would be considered a covered employee/establishment under either law, it’s wise to speak to your attorney at the first sign of financial trouble, so that you can put a game plan in place.

Documenting a Layoff

As we mentioned in our previous lesson about fires, California law requires that all involuntary exits be in writing, and the law requires that employees that have been involuntarily terminated be given access to unemployment benefits, healthcare, and other benefits (in certain circumstances). 

Because of this, your termination documents will likely look identical to those required for a fire (consult with your attorney to verify this is the case). The only obvious difference will be that you may be required to provide a WARN notice in addition to these! But otherwise, you’ll still need:

• The Notice to Employee as to Change in Relationship form;
• The “For Your Benefit” pamphlet;
• Any Consolidated Omnibus Budget Reconciliation Act (“COBRA”) required notices, including Cal-COBRA notices and the Health Insurance Premium Payment (“HIPP”) notice;
• Any IRS-required notices regarding retirement benefits; and
• Notification of all continuation, disability extension, and conversion coverage options under any employer-sponsored coverage for which the employee may remain eligible after employment terminates.
  

For more information on these documents and notices, please revisit the Fires (or "Involuntary Terminations") lesson.

If you do need to provide a California WARN notice, it's important to note that, due to a 2025 legal change, as of January 1, 2026 this notice must include whether the employer plans to coordinate services through the local workforce development board or another entity, as specified, and information regarding the statewide food assistance program known as CalFresh.

So if you've previously created a California WARN notice for your workplace, be sure to update it based on this legal change before any future use.

Final Pay Rules

Final pay rules also mirror fires. Specifically, 

• Employees who are fired must be paid on the same day as termination, at the place of termination; and
• The final paycheck must include any accrued but unused paid time off/vacation, and it can only be paid via direct deposit if the employee signs a separate authorization form for direct deposit; you cannot rely on the original form signed at the beginning of employment. More information on this in our previous lesson!

We know terminations are hard, and layoffs can be some of the most challenging. Layoffs are a situation where a severance package may make sense, depending on finances. We’ll cover this in a future lesson, so stay tuned!

This Lesson's Sources:

[1] Cal. Lab. Code § 1400.5

[2] 29 U.S.C. § 2101

[3] 29 U.S.C. § 2102

[4] Cal. Lab. Code § 1401

[5] 20 C.F.R. § 639.7