Just In Time For The Dreaded Recession – Mandated Severance Payments In New Jersey For Mass Layoffs And Closings – Employee Rights/ Labour Relations


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I Remember Something About This.

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.

What Is WARN, Anyway?

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:

  1. 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.

  2. 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

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

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.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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