The New Jersey WARN Act imposes notice and severance pay requirements upon covered employers who engage in mass layoffs. This can provide impacted workers with a much-needed “heads up” and financial assistance. However, there’s a tricky wrinkle: Governor Murphy signed an amendment to the WARN Act that mandates more generous notice and severance for workers, but this amendment is not currently in effect. Accordingly, your rights under the WARN Act are significantly less should you be laid off prior to the new law’s effective date.
(UPDATE: When this article was first published, the WARN Act amendments were scheduled to become effective on July 19, 2020. However, due to the severity of the COVID-19 pandemic, Governor Murphy has delayed the effective date of the amendments until 90 days after he lifts Executive Order 103, which imposes state-wide lockdown. E.O. 103 is currently set to expire May 8, 2020, making the earliest effective date of the amendments August 6, 2020. If Governor Murphy chooses to extend lockdown beyond May 8th, there will be further associated delays.)
Here’s a quick run-down of the legal protections available to you under both the current WARN Act and the amended version scheduled to go into effect. If you are impacted, please study these differences carefully – they are big and may very well determine whether you receive needed financial relief.
Definition of a “Mass Layoff” and “Establishment”:
Employer obligations under the NJ WARN Act are triggered when a “mass layoff” occurs at an employer’s “establishment”. The definition of these terms are changing considerably to include many more workers and employers.
Current NJ WARN Act:
A “mass layoff” results in the termination of at least 50 full-time employees at the “establishment”, andthose 50 full-time employees represent at least one-third (1/3) of the establishment’s full-time workforce.
“Establishment” is defined as a single location or group of contiguous locations (for example, an office park or industrial site).
Amended NJ WARN Act:
A “mass layoff” results in the termination of at least 50 full- OR part-time employees at the “establishment”, period. There is no requirement that these employees amount to 1/3 of the employer’s workforce.
Moreover, “establishment” is broadly defined as “a single location or group of locations, including any facilities located” in the state of New Jersey.
Right to Notice of Layoff:
Current NJ WARN Act: Employers with 100 or more full-time employees at their establishment must provide 60 days’ notice before any workers are discharged as part of a “mass layoff”, transfer of operations, or termination of operations.
Amended NJ WARN Act: Employers with 100 or more full- OR part-time employees at their establishment must provide 90 days’ notice before any workers are discharged.
Right to Severance Pay:
Current NJ Warn Act: Employers must provide employees terminated as part of a mass layoff severance pay equal to one week of pay for each full year of employment, ONLY IF the employer fails to provide such employees with 60 days’ advance notice of termination as required under the Act. In other words, severance pay serves as a penalty for not providing timely notice of layoff.
Amended NJ WARN Act: Employers must provide employees terminated as part of a mass layoff the aforementioned severance pay, irrespective of whether they meet the notice of termination requirements. However, if an employer fails to provide terminated employees the mandated 90 days’ advance notice of layoff, it must pay those employees an additional four weeks’ pay as penalty.
Exceptions Clarified In Response to COVID-19
Due to the havoc the state-wide lockdown has created for businesses, on April 14, 2020, Governor Murphy signed into law an additional amendment to the NJ WARN Act (retroactive to March 9, 2020) that clarifies that mass layoffs due to “national emergency” will not trigger the requirements of the Act. Accordingly, mass layoffs prompted by the COVID-19 pandemic are outside the reach of the Act. Given the strictness of the new NJ WARN Act and the new costs it imposes, some NJ employers may choose to implement mass layoffs before the amendment goes into effect. If you fall victim to such a layoff, know your rights and call our offices today for a free consultation.