Providing Developments & Insight on Trending Topics in Employment Law

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Providing Developments &amp; Insight on Trending Topics in Employment Law

I Remember Something About This.

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Remember back before COVID-19 arrived in the United States – can you remember that far back? Way back then, New Jersey passed amendments to the New Jersey WARN Act that would require employers to provide extended notice and severance to any employee displaced during a mass layoff or closing. Once COVID-19 hit and devastated the finances of so many employers, New Jersey suspended the enactment of the amendments until the State of Emergency related to COVID-19 was lifted in all respects. Last week, however, the New Jersey Legislature voted to enact the amendments while pieces of the State of Emergency remain in place, and on January 10, 2023, the governor signed the bill allowing those changes to go into effect.

As many may be aware after having had to quickly get up to speed during the COVID-19 furloughs and subsequent layoffs, WARN is the Worker Adjustment and Retraining Notification Act, which is a federal law that requires certain notices be sent at least 60 days prior to a mass layoff or closing, if the employer is covered by WARN and enough employees are affected by employment loss. The notices provided must go the employee; a union, if any; and various governmental contacts. There are specific requirements that the notice must meet in order to satisfy the law. Many states, including New Jersey, have what are called mini-WARN laws, which have additional or more stringent requirements than the federal WARN law.

What Does This Amendment Change in New Jersey?

The amendments will now require that employers subject to the law give at least 90 days’ notice before any mass layoff, transfer of operations or plant closing. The amendment does not change the number of employees an employer must have in order to be subject to NJWARN, which remains at least 100 employees, but now employers must count all employees, not just full-time employees. The amendments also change the minimum number of employees who need to be affected by employment loss in order to trigger the law in two ways:

The minimum number of employees who need to be affected by the employment loss is only 50 – regardless of whether or not they are one-third of the workforce.

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There is no longer a distinction between full-time and part-time employees, so all employees who are affected by an employment loss are now counted to determine if 50 or more are affected.

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Additionally, and arguably the biggest change, is the requirement to pay severance to employees who are affected by the employment loss. The severance should be one week per each full year of employment they have worked for the employer, or severance required by a collective bargaining agreement, whichever is greater. Additional severance is required if an employer fails to provide the requisite 90 days’ notice.

Wow. Is This in Effect Right Away?

The law goes into effect 90 days from passage, which is April 10.

What Should Employers Be Doing Now?

If employers know that they are headed for a layoff/plant closing, or may be, they may want to work as quickly as possible to effectuate those layoffs or plant closings prior to April 10 to avoid the additional costs associated with an extra 30 days’ paid notice and the severance required under the new amendments. Remember, however, that certain employers are still subject to the current NJWARN, which requires 60 days’ notice for certain qualifying events.

If you have questions related to planning a future layoff, relocation or closing; whether you are an employer subject to WARN; or how to draft compliant notices, please reach out to our team for additional information.

Just in Time for the Dreaded Recession – Mandated Severance Payments in New Jersey for Mass Layoffs and Closings