There are ups and downs in any business in California. There are many factors that lead to these swings, but during the good times, companies may hire extra employees needed to meet the demands. However, if work slows down, they do not need the extra employees, and in many situations, cannot afford to pay all of their employees. In these situations companies may need to lay employees off.
Companies can do this, but there are laws that require the companies to give their employees and government officials in the area notice that they are going to lay off employees. The law requires companies that employ at least 75 employees in the previous year to give their employees notice at least 60 days before the layoff, subject to some exceptions. This notice only applies to mass lay-offs, which mean that 50 or more employees are laid off in a 30 day period.
If the company does not give the required notice, they could be required to compensate their employees. This compensation includes paying the employees their regular pay for every day they did not give proper notice. They also could be required to compensate their employees for the benefits they should have received and could also have to pay for medical bills the employee incurred because their health insurance was terminated early. The company may also have to pay attorney's fees and costs if the employee is forced to start a lawsuit.
There are many reasons that companies in California may have to downsize. This is legal to do per se, but they do have to give the affected employees notice at least 60 days before they will be laid off. If they do not they may need to compensate the employees with back pay and pay for their benefits as well. It is important that employees understand their rights in these situations and experienced attorneys may be a helpful resource.