The Basics on Layoff Notices in Washington State
Layoff notices are an important aspect of employment law in Washington State, pertaining to when an employer has to give advance notice to employees that they will be laid off and/or have their job positions eliminated. There are two State laws governing layoff notices: the Worker Adjustment and Retraining Notification Act or WARN Act, which applies to commercial industry employers; and the Plant Closures Law, which applies primarily to manufacturing operations. Federal WARN law also applies if a layoff involves 100 or more full-time employees at a single job site, but in the context of Washington State Department of Employment Security issues, State WARN and Plant Closures laws are usually applicable.
Washington State WARN law requires a 60-day advance notice to employees and their bargaining representatives if 100 or more full-time employees are to be laid off, either at a single job site or at two or more job sites located within a one-mile radius. The advance notice is also required for partial (or plant-wide) layoffs that reduce workforce by over 50% at a job site, or to a point 75 or more employees total from two or more job sites within a one-mile radius. The notice requirements also extend to either mass layoffs (of 25-99 full-time workers) or relocations or terminations of 50-99 employees at a job site .
The Plant Closures law requires a reasonable advance notice to affected employees if: 50 or more full-time employees are to be laid off at any time over a 30-day period; the employer is not in bankruptcy, and is not a major or principal creditor in a bankruptcy proceeding involving another business; and the business activity at issue has not ceased or been sold to another employer. Like the WARN law, the Plant Closures law generally applies when employees are laid off at a single job site.
Most business entities with a physical presence in Washington State and 50 or more full-time employees on average over a given year must comply with the law. However, over 90% of private sector jobs in Washington are at companies with less than 50 employees. Thus, because the Plant Closures law is a counter to the "small firm bias" in some employment laws, the law does not apply to most Washington businesses. However, the law can apply, for example, to a chain of fabric stores in Washington, or a pizza delivery chain that operates in the State.
While the Washington WARN law does not involve government oversight or review, the Plant Closures termination law requires advance notice to the Washington State Department of Employment Security, which undertakes a "technical review" to determine if advance notice obligations were triggered for any reason.
Who Is Subject to the Layoff Notice Laws
The Washington State layoff notice requirements apply to the following employers, including:
• Private sector employers with 100 or more employees;
• Private sector employers who do business in Washington State and are required by state or federal law to give notice;
• Local governments; and
• State government agencies.
Like the federal WARN Act, there are exceptions to the notice provision in August 2008 when many employees of Washington Mutual Bank were transferred to JP Morgan Chase.
A "creditor-buyer" must provide all, or substantially all, of the notice required of a seller, for example:
• A buyer or transferee that lays off 100 or more employees within 30 days of:
— The acquisition of substantially all of the seller’s assets; or
— Consumers’ cessation of payment on debts owed the seller.
A "successor employer" must provide all, or substantially all, of the notice required of the transferor-employer if the "successor employer" has had:
• 100 or more employees in Washington State during any 60 out of the 120 calendar weeks preceding the sale date, and whose business is of a similar type on a national or regional basis as that of the seller prior to the sale.
Exceptions to the "successor employer" layoff notice requirement include:
• Contracts between the parties occupying the same location or facility if less than 90 days prior to the sale date.
• Contracts approved by the federal Secretary of Labor, for the sale of all or substantially all of an employer’s assets in OHSHA-shutdown.
When and How to Provide Layoff Notices
As specified in RCW 49.17.050, the time to prepare and provide layoff notices is measured in "reasonable notice." Because the state courts have not had the opportunity to address how much notice is "reasonable," employers have little guidance on this issue. Some agencies have dictated a minimum of 30 days for notice, but this is only for their enforcement purposes and isn’t the definitive answer for layoff timing. Washington courts do recognize that for some businesses, it may be reasonable to provide less notice to employees. A reasonable approach is to consider the following when determining timing for layoff notices: Ultimately, what will guide your decision in determining how much notice to provide employees for layoff is the business’s desire to make layoffs both legally compliant from an employee notice perspective, and also tactically savvy to the extent possible.
Essential Elements of a Layoff Notice
The layoff notice should include the following information:
The employer’s general phone number. A business phone number that includes the area code must be provided in all layoff notice letters.
Reasons for the layoff. The notice must indicate the reason or reasons for the layoff.
Layoff place. For a layoff at a different place than the employer’s mailing address, the notice must include the location of the layoff.
Layoff date. The layoff date or dates must be provided. Notice must be given at least 60 days before the date of the layoff. If an employee’s last work day is a few days before the layoff date, the notice may be effective until the last work day. When an entire plant or facility is closing, one notice to all employees will suffice.
Layoff duration. The notice must indicate the anticipated number of days of layoff. While not required, the following language or language similar may be useful:
Layoff procedure. You may use some or all of the following language in your layoff notice and thereby avoid requiring all employees to return to work on the layoff date:
- (1) Employees will receive [one (1)] hour of notice from their immediate supervisor prior to their last shift of work at which they will actually work before their layoff. Employees will receive [up to six (6)] earned sick leave hours during the layoff period and may use those hours per [WAC 246-830-900]. Employees may request earned sick leave the day prior to, the day of, or within three (3) days after the layoff date.
- (2) [Employer name] will offer returning employment on the employee’s same schedule, if available, or the next closest available shift schedule for regular hour work, consistent with [WAC 246-830-900].
- (3) [Employer] will offer returning employment on or after the initial layoff date. Employees must take the offered layoff within three (3) working days after this notice is received or after [Employer] makes contact with the employee, whichever is later.
- (4) Employees who are offsick on the release date but want to accept work at the end of their layoff must so indicate in a return notification to their immediate supervisor.
Layoff activities. If an employee is being laid off but will be performing work for the company (consulting, project work, training, etc.), you may use this type of language:
These type of details provide clarity to your notice, indicate actual due diligence and may also reduce liability in the event a claim arises.
Penalties for a Layoff Notice Violation
If an employer fails to provide the requisite layoff notice and someone loses their job due to an unlawful layoff, the employer may be subject to a real on-the-ground consequence—namely, a civil lawsuit. Whether an employee filed a claim for unemployment compensation does not affect the employee’s ability to file a lawsuit against the employer. The law permits employees to sue for the statutory penalty plus lost wages and benefits resulting from the employer’s layoff. RCW 50.40.050(4). For employees affected by an "affected employer’s" layoff, they may sue to recover a "statutory penalty equal to the amount of wages and benefits the affected employees would have received . . . ." RCW 50.40.030(1). This is a significant penalty, equal to the double of a months’ pay. It does not exclude any benefits, such as bonuses, payments in lieu of being paid sick leave, or other forms of compensation. Private rights of action are not the only consequence available to aggrieved employees. Injured employees may also file a complaint with the Department of Labor & Industries ("L&I"). Wages claimed to be unpaid may be assessed through an L&I wage complaint filed with the Department. See, e.g. , RCW 49.48.085(1)(b) (permitting filing of a "claim for collected assessments for wages withheld in violation of RCW 49.48.050"). An investigating officer of L&I may notify the employer that it has until a certain date to pay wages owed to the employee for a failure to give notice under the law. See RCW 50.40.030(1) (notifying that L&I must notify employer "prior to [the employer] being required to pay the assessed penalty under this subsection."). If the employer does not pay the owed wages, L&I may take action against the employer in civil court. RCW 50.40.030(1). Then there are the civil penalties for failing to comply with L&I investigatory requests. A $500 per day penalty may be assessed against an employer failing to comply with a request for all relevant information regarding an employee’s claim for wages allegedly unlawfully withheld. RCW 49.48.085(9). The statutory penalties outlined above are strict liability; they require no intent by the employer. RCW 50.40.030(3); RCW 49.48.085(5). Some case law involving RCW 49.48.050 clearly states that good faith by an employer shall not excuse the nonpayment of wages. Of course, a finding of good faith might help to mitigate the amount owed the employee. Employers should seriously consider putting in place a conformity procedure to ensure that proper notice is given to employees.
Employee Layoff Entitlements
Employee rights during layoffs are important to understand, particularly if a layoff notice is issued. Generally speaking, an employee receiving a layoff notice may be entitled to continued benefits and enhanced severance packages through negotiations with the employer, or via the employer’s severance or employee retirement plans.
Several state-provided resources may also be available to assist in obtaining retraining assistance after a layoff. For example, Washington law provides for unemployment insurance benefits for individuals who are unemployed for certain reasons, and one of the reasons for which benefits are available is for individuals laid off from employment. Washington’s Employment Security Department (ESD) administers benefits for eligible unemployed workers, and the Layoff Services Program of Washington can assist in providing funding for retraining services. Likewise, state-sponsored Workforce Development Centers may provide retraining resources, as well as housing assistance for affected workers.
Layoff Frequently Asked Questions
Q: Does this law apply to me?
A: It will apply if you have decided to lay off 50 or more employees at a single site of employment in a 30-day period, or 500 or more employees total at one or more sites of employment during a 30-day period. It does not apply to plant closures or mass layoffs that are covered by the Worker Adjustment and Retraining Notification (WARN) Act.
Q: Are there any exceptions to the Act?
A: Yes. The main exceptions are: (1) an employer’s need for a layoff is caused by a physical calamity or act of war, (2) an employee has been involuntarily terminated for cause, (3) there is a work stoppage after a strike or lockout, or (4) a layoff or termination of employment is continuously ceased within a period of six months.
Q: Which employers are subject to this law?
A: Employers are covered if they have at least 100 employees and are engaged in for a profit purpose.
Q: If I am covered by this law, what do I need to do before implementing a layoff?
A: You must give affected employees written notice at least 60 days prior to a layoff of 50 or more employees. If it is not reasonably possible to provide the written notice (for example, a natural disaster), you may provide less notice by filing a petition with the local workforce development council to approve a shortened notice. You are also required to file a notice with the local workforce development council.
Q: Are there any penalties for not complying with this law?
A: Yes. You will be liable for the employee’s wages and benefits from the date of layoff until the date the notice should have been given, as well as any reasonable attorney fees incurred by the employee. An employer cannot assert any defenses or mitigation to the above damages.
Final Employee Layoff Notices
As we’ve covered in this article, there are a variety of requirements related to layoffs that employers need to be aware of, including notice and mass layoff requirements under federal and state law, various WARN Acts, and the necessity to provide earned sick and safe leave (ESSL) to impacted employees, including for many of the employees in "temporary" layoff status. On top of addressing those requirements, there are also other requirements. For example, there is the requirement to offer continued health insurance benefits to discharged employees and give them tax information regarding those options. One of my colleagues has described this process on her blog . Employers should be mindful of these obligations when planning a layoff. There are a few key takeaways to remember from this article: We advise employers to proceed with caution when planning for any type of termination or layoff. Beyond simply running afoul of state and federal WARN Acts and ESSL requirements, failing to follow these processes can have additional consequences. For example, there are certain disclosure requirements applicable to employers that decide to close a health facility. Employers should review their obligations carefully with an attorney before proceeding with layoffs to ensure compliance and minimize risks.