Three Years After They Were Signed Into Law, The NJ Mini-WARN Act Amendments Will Become Effective: Mass Layoffs Will Come At A Cost For Employers

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March 21, 2023

The Worker Adjustment and Retraining Notification (WARN) Act is a federal law that requires employers to provide at least 60 days’ notice, with certain exceptions, to employees before a plant closing or a mass layoff.  The purpose of the WARN Act is to give workers advanced notice and time to adjust to the expected loss of employment, to seek and obtain new jobs, and, in certain circumstances, to enroll in necessary skills training to compete in the job market.

New Jersey (NJ) has its own version of the federal WARN Act, the Millville Dallas Airmotive Plant Job Loss Notification Act (NJ mini-WARN Act or Act).  On January 21, 2020, Governor Phil Murphy signed into law amendments to the Act.  The amendments were to become effective in July 2020, but on March 9, 2020, Governor Murphy declared a public health emergency in response to the COVID-19 pandemic, resulting in delays to the amendments’ effective date.

On January 10, 2023, three years after the amendments were enacted, Governor Murphy signed a bill, making the amendments effective in 90 days.  Thus, effective April 10, 2023, the amendments will apply to New Jersey employers in connection with mass layoffs and plant closings, and include important changes for which employers should be prepared.

Notice Period Increased to 90 Days
The amended NJ mini-WARN Act increases the notice period from 60 days to 90 days.  Employers must provide 90 days’ notice to employees before a plant closing or mass layoff of 50 or more employees within a 30-day period.  The employees can be anywhere in the United States, and terminations at different work sites are counted together.

Severance Is Now Automatic, with a Penalty for Lack of Compliance
The amendments will require employers to pay severance automatically for a mass layoff or plant closing even when the employer provides the required 90 days’ notice.  The severance is “equal to one week of pay for each full year of employment,” and applies to both full- and part-time employees.  New Jersey will be the only jurisdiction requiring severance pay in addition to proper notice under a WARN law.

Additionally, employers will be penalized if they violate the notice requirement.  Specifically, employers who fail to provide 90 days’ notice of a mass layoff or plant closing will have to pay severance in the amount of four weeks (instead of one) of pay per employee.  Employees may not waive their right to severance without state or court approval.

Note:  On April 14, 2020, New Jersey changed the definition of “mass layoff” to exclude “national emergencies.”  See NJ SB 2353.  Thus, the NJ mini-WARN Act, including the new severance requirements, would not apply to mass layoffs resulting from circumstances like the COVID-19 pandemic.

Expansion to Scope of Mass Layoffs and Definition of Employers
The amendments expand the definition of “employer” to include “any individual, partnership, association, corporation, or any person or group of persons acting directly or indirectly in the interest of an employer in relation to an employee.”  The Act currently includes only “an individual or private business entity which employs the workforce at an establishment.”

Further, the amended law requires notice and severance for employers with 100 or more employees, including both full- and part-time employees, located anywhere in the United States, regardless of tenure or hours worked, so long as the employer has operated in New Jersey for at least three years.  Currently, the Act does not include part-time employees.

The amendments also redefine “mass layoff” as “a reduction in force which is not the result of a transfer or termination of operations and which results in the termination of employment at an establishment during any 30-day period for 50 or more of the employees at or reporting to the establishment.”  The Act currently defines mass layoff to require the termination of 500 or more full-time employees, or 50 or more full-time employees representing one third or more of the full-time employees at the establishment.

Establishment Redefined
Currently, the Act defines an “establishment” as a “single location or group of contiguous locations including groups of facilities which form an office or industrial park or separate facilities just across the street from each other.”  The amendments address remote employees by eliminating the language pertaining to forming an office or separate facilities across the street from each other.

Takeaways
Employers in New Jersey should take steps to ensure compliance with the new requirements of the NJ mini-WARN Act, including, but not limited to:

• Reviewing and updating current procedures in connection with notice and severance pay
• Updating budgets to reflect the additional mandatory costs of severance pay and the potential legal claims in the event of a non-compliance
• Reviewing employment agreements, collective bargaining agreements, and ERISA programs, as they may include severance policies that will need to be compliant with the amendments
• Retraining managers and other employees on the new requirements
• Consulting with counsel to ensure compliance with the NJ mini-WARN Act and the federal WARN Act

A full copy of the NJ mini-WARN Act can be found here and its amendments here.

This article is designed to provide one perspective regarding recent legal developments, and is not intended to serve as legal advice.  Always consult an attorney with specific legal issues.