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Tech Layoffs Prompt Legislation to Protect Contract Workers

March 15, 2023 | Employment Law

Facebook’s parent company, Meta is planning to layoff 10,000 employees and close 5,000 open, unfilled positions. This follows November layoffs of 11,000 or 13% of Meta’s workforce. In October, Elon Musk acquired Twitter and promptly laid off almost half its workers. Last year Amazon laid off 18,000, 8,000 from Salesforce, 12,000 from Google, and Microsoft cut 10,000 employees. Typical for tech firms, more than 50% of Google’s workers are contract employees. If they’re not rehired or if their contract is canceled the loss of their jobs do not register as  layoffs.


Extensive reliance on contract workers in tech and across all industries has created a “second-tier workforce.” Contract workers comprise a greater percentage of people of color as compared to directly employed workers. Contract workers have no form of compensation after being fired; no 401(k), stock options, severance, etc. Some of these California residents will qualify for unemployment.


The federal Worker Adjustment and Retraining Notification (WARN) Act and California’s mini-WARN Act combine to protect some laid off employees. California state lawmakers have introduced a bill requiring employers to give employees more notice and to extend these protections to contract workers. Assemblymember Matt Haney (D-San Francisco) introduced The Protect Laid-off Workers bill stating, “This bill is about protecting the workforce, from engineers to janitors, and making sure they’re treated fairly during a job transition” and making note of the state’s highly skilled workforce which attracts tech companies to start up in California and remain here. 


Employers laying off more than 50 workers would be required to give them 90 days notice. They would also be prohibited from pressuring employees to sign non-disclosure or non-disparagement agreements as a condition of severance pay. The tech sector is notorious for this practice. These existing agreements would be voided with the passing of AB 1356.


If you were laid off, as a directly employed worker or contract worker, contact our experienced attorneys who will evaluate your personal situation and aggressively represent your case.