We have fewer than 100 employees. Does Cal-WARN still apply to us?

Possibly. Cal-WARN (Cal. Lab. Code §§1400-1408) applies to a covered establishment, meaning a facility that employs, or has employed within the preceding 12 months, 75 or more persons, a lower threshold than the 100-employee threshold under federal WARN (Cal. Lab. Code \u00a71400.5(a)). A mass layoff is a layoff of 50 or more employees at a covered establishment in any 30-day period, regardless of what percentage of the workforce that represents (Cal. Lab. Code \u00a71400.5(d)). Businesses near either threshold should confirm coverage before finalizing a reduction.

Reductions in Force, Layoffs, and Furloughs

Michael Trust founded Michael Trust Law, APC after more than 35 years in HR leadership across entertainment, healthcare, higher education, finance, banking, solar energy, and other industries, including managing approximately 35,000 disability and leave-of-absence cases. He holds the SPHR, PHRca, and SHRM-SCP credentials. The PHRca is a California-specific HR credential focused on California employment law and HR practice. According to HRCI’s published pass-rate statistics at https://www.hrci.org/pass-rates, the PHRca has the lowest pass rate of all HRCI credentials — 47% as of December 31, 2025, compared with 71–84% for HRCI’s other certifications — and only 293 candidates worldwide tested for it in 2025. That HR-systems background helps identify HR process issues early, which can shape legal analysis on both sides.

Employer Reductions in Force

Reductions in force (RIFs) require careful planning to minimize risk and ensure compliance. Michael Trust Law, APC helps employers design and implement workforce reductions that are defensible, compliant, and strategically aligned with business goals.

California Reductions in Force, Layoffs, and Furloughs — Employer Counsel

California layoffs and plant closures are subject to Cal-WARN (Cal. Lab. Code §§1400-1408), which requires 60 days’ advance written notice to affected employees, the California Employment Development Department (EDD), and local government for covered “mass layoffs,” plant closures, and relocations. Cal-WARN is broader than federal WARN in several respects: it applies to a covered establishment, meaning a facility that employs, or has employed within the preceding 12 months, 75 or more persons (not 100 employees), and a mass layoff means a layoff of 50 or more employees at a covered establishment in any 30-day period, regardless of the percentage of the workforce affected (Cal. Lab. Code §1400.5).

What Effective RIF Planning Requires

Beyond Cal-WARN compliance, RIFs in California require disparate-impact analysis to ensure that selection criteria do not disproportionately affect protected groups; severance design that complies with the Older Workers Benefit Protection Act (29 U.S.C. §626(f)) for any employee age 40 or older who waives age claims, including the 21-day consideration period (or 45 days for group terminations), 7-day revocation period, and required disclosures; immediate final pay under Cal. Lab. Code §§201-203; and careful release language that satisfies California’s heightened scrutiny of unfair-business-practices claims, PAGA waivers, and the limits on settlement confidentiality for filed harassment, discrimination, and retaliation claims (Cal. Code Civ. Proc. §1001). Whether a particular RIF approach is defensible is fact-specific and depends on workforce composition, selection criteria, and documentation.

When to Contact Us

RIF planning benefits substantially from advance legal review of selection criteria, notice obligations, and release design. Contact Michael Trust Law, APC.

Initial contact does not create an attorney-client relationship — see Disclaimers.

Cal. Lab. Code §§1400-1408 (Cal-WARN); Cal. Lab. Code §§201-203 (final pay); Older Workers Benefit Protection Act, 29 U.S.C. §626(f); Cal. Code Civ. Proc. §1001.

Furlough vs. Layoff: Key Differences

Aspect	Furlough	Layoff
Employment Status	Employee remains employed but work is temporarily suspended	Employment relationship is terminated
Duration	Intended to be temporary	Permanent or indefinite
Benefits	Often continue (health insurance, retirement contributions)	Typically end, subject to COBRA or severance terms
Pay	No wages during furlough, but employment remains	Final wages due immediately under California law
Legal Considerations	Must comply with wage/hour rules and benefit continuation	Must comply with WARN Act and Cal‑WARN notice obligations, discrimination safeguards, and severance requirements

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Frequently Asked Questions

Possibly. Cal-WARN (Cal. Lab. Code §§1400-1408) applies to a covered establishment, meaning a facility that employs, or has employed within the preceding 12 months, 75 or more persons, a lower threshold than the 100-employee threshold under federal WARN (Cal. Lab. Code §1400.5(a)). A mass layoff is a layoff of 50 or more employees at a covered establishment in any 30-day period, regardless of what percentage of the workforce that represents (Cal. Lab. Code §1400.5(d)). Businesses near either threshold should confirm coverage before finalizing a reduction.

For an employee age 40 or older whose release waives age claims, yes. The Older Workers Benefit Protection Act (OWBPA), 29 U.S.C. §626(f), requires a 21-day consideration period for an individual termination, or 45 days for a group termination, plus a 7-day revocation period after signing, along with specific disclosures. A release signed before the required period runs may not validly waive age-discrimination claims.

It can. Calling a reduction a furlough does not by itself delay final pay. Under Cal. Lab. Code §201, when an employer discharges an employee, the wages earned and unpaid at that time are due immediately. The Division of Labor Standards Enforcement treats a temporary layoff with no specific return date within the employee’s normal pay period as a discharge, so final wages are due when the furlough begins. If the employee has a specific return date within the pay period and returns, the wages may be paid on the next regular payday. An employer that willfully fails to pay on time may owe waiting-time penalties of up to 30 days of wages under Cal. Lab. Code §203. A furlough should be structured with these rules in mind.

Not without limits. Cal. Gov. Code §12964.5 limits provisions that deny an employee the right to disclose information about unlawful acts in the workplace, and Cal. Code Civ. Proc. §1001 limits settlement provisions that prevent disclosure of factual information about a filed claim of harassment, discrimination, or retaliation. An overbroad clause can be unenforceable or create separate exposure. Severance language should be reviewed against the specific claims being released, not copied from a generic template.

Plan Reductions in Force with Legal Guidance

Michael Trust Law, APC helps employers implement reductions in force that reduce risk, ensure compliance, and safeguard business continuity. Contact Michael Trust Law, APC to discuss your situation.

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