The New Jersey WARN Act

New Jersey’s employers must provide notice to their employees when they are about to make a mass layoff. Both the federal WARN Act and the New Jersey WARN Act are the sources of these obligations. The New Jersey WARN Act was passed in 2007 but has recently been amended, and we discuss the key changes below.

These amendments will be delayed temporarily due to the COVID-19 pandemic. The government has decided to temporarily delay implementation of the changes to the law.

Key Provisions of the New Jersey WARN Act

The NJ WARN Act is a massive piece of legislation, but some of the more important provisions can be summarized below:

  • Employer coverage. The New Jersey WARN Act covers all employers with 100 employees in the state. This number includes part-time employees. Previously, the law required that employers have 100 full-time employees.
  • Notification triggers. When an employer lays off 50 or more employees, it must provide the relevant notice. The employer must consider all layoffs it is making in the state—and not simply at one job site. It must also aggregate layoffs happening in a 90-day period. Previously, the notification requirements were triggered when an employer laid off 500 workers or at least a third of their workforce. The old rule only aggregated layoffs in a 30-day period.
  • Notice period. An employer must provide at least 90 days’ advance notice of the impending layoff. Previously, the state only required 60 days’ advance notice.

The notification must be provided to the employee and, in some cases, employee representatives like unions.

Guaranteed Severance

When it updated its WARN Act, New Jersey broke new ground by requiring that employers provide severance. Employees are entitled to one week of severance for each year they worked for the company. So an employee who was with the company for 12 years gets 12 years of severance if they are part of a layoff that triggers WARN notices.

Before the revisions, employees were only entitled to compensation if their employer violated the warning requirements.

Private Lawsuits for Violations

If an employer does not provide the necessary notice in a timely manner, then employees can sue. The new law provides that they are entitled to four weeks of severance for each year worked at the company if the employer did not provide a timely notice of the layoff. Under the old law, an employee would receive one week of severance for each year worked.

The new law has also made it harder for employers to get waivers from employees. Now, they need approval from a judge or the state. Some companies were requiring employees to sign a release of claims before getting severance pay. For this release of claims to be valid going forward, employers will need to offer more than the required minimum severance.

Delayed Implementation

As mentioned above, the implementation of the changes has been delayed. They were expected to go into effect on July 19, 2020. Due to the ongoing COVID-19 pandemic, however, the effective date of implementation has been pushed back until 90 day after the state of emergency is lifted in New Jersey. Until then, the old WARN Act requirements are in place, which is why we discussed the old requirements above.

At our firm, we stay abreast of the economic climate and are closely watching when Governor Murphy lifts the state of emergency. According to media reports, the business community is trying to get the implementation date delayed even further, perhaps to 180 days after the state of emergency is lifted. Many businesses anticipate needing to make massive layoffs due to the recession.

If you have a question, contact Sattiraju & Tharney, LLP today. We would be pleased to meet with you for an initial consultation.