Lindabury, McCormick, Estabrook & Cooper, P.C. Firm News & Events
On January 10, 2023, Governor Murphy signed legislation implementing amendments to the Millville Dallas Airmotive Plant Job Loss Notification Act (“NJ WARN Act”) that were placed on hold during the COVID-19 pandemic. The amendments, which go into effect on April 10, 2023, impose new requirements on employers of 100 or more who implement mass layoffs or plant closures.
Background
Governor Murphy initially signed an amended NJ WARN Act on January 21, 2020, which was scheduled to take effect on July 20, 2020. However, in April 2020, the Governor signed Executive Order 103 declaring COVID-19 a public health emergency and postponing the effective date of NJ WARN Act amendments until 90 days after the conclusion of the state of emergency. Although the COVID-19 state of emergency remains in effect, the Legislature “unlinked” the amended NJ WARN Act from the state of emergency, thus permitting the implementation of the amendments to take effect on April 10, 2023.
Key Takeaways
The NJ WARN Act amendments impose significant obligations on New Jersey employers that far exceed the requirements of the original Act and federal WARN Act.
- Expanded Applicability: Currently, the NJ WARN Act applies to employers with 100 or more full-time employees. Under the amendments, the Act will now apply to employers with 100 or more employees regardless of their full or part-time status. As a result, many more small businesses will now be covered employers under the Act.
- Notice Obligations: – Under the existing NJ WARN Act covered employers are only required to provided 60 days’ notice to affected employees before implementing a “mass” layoff, termination of operations, or transfer of operations. The amendments extend the notice period to 90 days. Critically, an employer who fails to provide 90 days’ notice will be required to provide each affected employee with an additional 4 weeks of severance, above and beyond the new mandated severance discussed below.
- Mandatory Severance: – Under the existing NJ WARN Act, employers are only required to pay severance as a penalty if the employer fails to provide the required notice. Now, New Jersey employers must provide discharged employees with one week of severance pay for each full year of employment, even if the proper advance notice was provided. (Please note that a pending lawsuit is currently challenging this portion of the amendments on the grounds that the mandatory severance requirement is preempted by Federal law).
- Lower Threshold for Mass Layoffs: – To constitute a “mass” layoff under the existing NJ WARN Act, the layoff must result in the discharge of at least: (1) 500 employees at the establishment or (2) 50 employees representing at least 33 percent of the total workforce of the establishment. Under the amendments, NJ WARN Act obligations are trigged by any layoff impacting 50 employees, even if 50 is below the 33 percent threshold.
- Layoffs at All Establishments Now Counted: The current law only applies to mass layoffs in a single establishment, which may be a single location or group of contiguous locations, including industrial parks. The amendment dispenses with the single facility concept, and “establishment” now collectively includes all the employer’s locations within the state, excluding temporary construction sites. Employers with multiple small facilities scattered throughout the state may now be covered.
Conclusion
Considering the looming changes brought on by the NJ WARN ACT amendments, employers must keep in mind the expanded coverage of the Act, the longer notice requirements, and the mandatory severance pay obligations when contemplating mass layoffs, plant closures or a transfer of operations outside the state. The Employment Attorneys at Lindabury McCormick, Estabrook & Cooper, P.C., can provide legal guidance to employers to ensure compliance with these new requirements.