BILL ANALYSIS
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THIRD READING
Bill No: AB 2957
Author: Koretz (D)
Amended: 8/14/02 in Senate
Vote: 21
SENATE LABOR & IND. RELATIONS COMMITTEE : 5-3, 6/26/02
AYES: Alarcon, Figueroa, Kuehl, Polanco, Romero
NOES: Margett, McClintock, Oller
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 42-29, 5/13/02 - See last page for vote
SUBJECT : Employment: mass layoffs, relocations, and
terminations
SOURCE : California Labor Federation
DIGEST : This bill supplements the federal plant closure
law, by requiring notification of layoffs, terminations,
and relocations, which affect 499 or fewer employees.
Violators are liable for back wages and civil penalties.
ANALYSIS : Existing federal law, the Worker Adjustment
and Retraining Notification (WARN) Act, governing plant
closures and mass layoffs, applies to businesses with 100
or more employees. There are different requirements which
trigger notice under WARN. Notice is necessary for plant
closures that affect 50 or more employees. A mass layoff
requires notification when 500 employees or 50 employees
that make up a third of the workforce are affected.
CONTINUED
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Layoffs of fewer than 500 frequently do not trigger the
notification requirements, and businesses with less than
100 employees are exempt. Violators are subject to a court
action with assessed penalties.
This bill would enact a uniform state standard of
notification for mass layoffs, relocations and
terminations:
1. It lowers the requirement to facilities with 50 or more
persons and requires notification of layoffs,
relocations or terminations that will affect at least 50
employees or one-third of the employer's workforce,
provided it employs at least 50 people.
2. Applies to commercial and industrial facilities, similar
to the WARN Act.
3. The employer must give 60 days notice to the employees,
the Employment Development Department, local workforce
investment board and to affected local officials.
4. Notification forms for the federal WARN Act can be used
under this provision.
5. Where mass layoffs, relocation or termination are the
result of physical calamity or an act of war no notice
is required. In addition to this, notification is not
needed for seasonal or temporary employment or for the
completion of a project where the employee understood
their employment was limited in duration.
6. An employer who fails to give notice will be liable for
back pay, benefits, and a fine of $500 a day not to
exceed 60 days.
7. Liability will be reduced if employer continues to pay
the employees wages and or benefits during the period of
violation. As well as if the employer conducted a
reasonable search and in good faith had reasonable
grounds to believe it was not in violation.
8. Provides exemptions from the notification requirements
for employers under certain circumstances, including if
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the employer is actively seeking capital and reasonably
and in good faith believes that giving the 60 days
notification would preclude obtaining the capital.
9. An employee, representative thereof, or local government
may maintain a civil action on behalf of those affected,
and the court may award attorney's fees to a prevailing
plaintiff.
10.Provides that payments received by workers as a result
of an employer's violation of this statute may not be
construed as wages or compensation for the purposes of
unemployment insurance, and that unemployment benefits
may not be denied or reduced as a result of such
payments.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/13/02)
California Labor Federation (source)
American Federation of State, County and Municipal
Employees
California Applicants' Attorneys Association
California Conference Board of the Amalgamated Transit
Union
California Conference of Machinists
California Professional Firefighters
Catholic Bishops of California
Engineers and Scientists of California
Hotel Employees, Restaurant Employees International Union
Teamsters
United Food and Commercial Workers Region 8 States Council
United Nurses Associations/Union of Health Care
Professionals
OPPOSITION : (Verified 8/13/02)
California Chamber of Commerce
California Employment Law Council
California Manufacturers and Technology Association
California Restaurant Association
Civil Justice Association of California
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Employers Group
Motion Picture Association of America, Inc.
ARGUMENTS IN SUPPORT : Proponents argue mass layoffs have
a devastating impact on the communities in which they
occur. This bill will give communities a chance to prepare
for the impact of large layoffs which do not trigger
notification under the WARN Act. The concern over WARN is
there can be a mass layoff of 499 or fewer with no notice
to the community because the employees laid off do not
constitute a third of the workforce.
By providing notice to local governments and other
concerned entities, they will be in a better position to
retrain and offer placement services to those affected. On
top of this, notice will give affected employees the
greater ability to make plans and adjustments to their new
situation as well as seek other employment and educational
opportunities. It will also allow for local resources to
be utilized helping to ease the strain caused by a layoff
or plant closure on the community.
ARGUMENTS IN OPPOSITION : Opponents state this bill will
create overlap with the federal WARN Act and may create
confusion thereby leading to duplicative legal actions and
raising litigation costs. Also, opponents feel it is
unfair to only award attorney's fees to a prevailing
plaintiff and not an employer who prevails.
ASSEMBLY FLOOR :
AYES: Alquist, Aroner, Calderon, Cardenas, Cardoza, Chan,
Chavez, Chu, Cohn, Corbett, Diaz, Dutra, Firebaugh,
Florez, Frommer, Havice, Hertzberg, Horton, Jackson,
Keeley, Kehoe, Koretz, Longville, Lowenthal, Migden,
Nakano, Nation, Negrete McLeod, Oropeza, Pavley, Reyes,
Salinas, Shelley, Simitian, Steinberg, Strom-Martin,
Thomson, Vargas, Washington, Wayne, Wiggins, Wesson
NOES: Aanestad, Ashburn, Bates, Bogh, Briggs, Bill
Campbell, John Campbell, Cogdill, Cox, Daucher,
Dickerson, Harman, Hollingsworth, Kelley, La Suer,
Leonard, Leslie, Maddox, Maldonado, Mountjoy, Robert
Pacheco, Rod Pacheco, Pescetti, Richman, Runner,
Strickland, Wyland, Wyman, Zettel
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NC:sl 8/14/02 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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