If you cease operations, you have two options with respect to your employees: (1) layoff your employees or (2) furlough your employees. 1. Laying Off Employees If you layoff your employees, they are essentially being terminated with the potential to later be reinstated. That means when the crisis subsides, you can reinstate them, but in the interim you have no obligations to them. However, prior to laying them off, you do need to pay your employees for all hours worked and accrued vacation/paid-time off. Failure to pay employees everything they are owed when laying them off may result in you being assessed Labor Code penalties. If you employ over 100 full-time employees and you layoff 50 or more employees during at a time, you may be required to provide 60 calendar days’ notice of a mass layoff under the Worker Adjustment and Retraining Notification Act (“WARN”). It is likely that the natural disaster exception to WARN’s notice requirements will apply to allow mass layoffs during this crisis, but it has not been litigated, so there are no guarantees. Even so, the penalty for a WARN violation is only $500 a day, which is far less daily payroll for most hotels. 2. Furloughing Employees The second option is furloughing. A furlough is an involuntary leave of absence for employees. This means that during a furlough, your workers are still your employees, they are just not scheduled to work. If furloughed employees have benefits like health insurance or paid time off, those benefits continue. Workers can elect to use accrued paid time off while furloughed. Furloughed employees cannot utilize sick leave because they are not scheduled to work any shifts. Furloughed employees also likely qualify for unemployment. We recommend having all employees update their contact information prior to putting a furlough into effect. Because once people start traveling again, you will need to be able to alert the employees when operations resume. Any employees who do not return to work within a reasonable timeframe after being notified to return to work may be separated as having abandoned their positions. 3. The Advantage of Furloughing Rather Than Laying Off Furloughing employees may be more advantageous to employers who do not have large banks of paid time off. First, furloughing employees give you the ability to recall employees gradually without going through the process of reinstating. Second, many furloughed employees will resign during the furlough or find employment elsewhere, which may reduce your workforce’s unemployment utilization, which saves money in the long-run.