5 Things to Know About the NJ WARN Act Amendments
Amendments to the NJ Warn Act went into effect on April 10, 2023. These amendments impose substantial obligations on employers of 100 or more people nationwide with employees and/or offices in New Jersey.
Originally passed in 2007, the NJ WARN Act – officially known as the Millville Dallas Airmotive Plant Job Loss Notification Act – is the state’s equivalent of the federal Worker Adjustment and Retraining Notification (WARN) Act. Like its federal counterpart, the NJ WARN Act requires employers that meet certain criteria to give employees notice in advance of mass layoffs or similar actions that would result in a significant workforce reduction.
In 2020, New Jersey Governor Phil Murphy signed into law a bill which amended the NJ WARN Act (implementation was delayed due to the pandemic.) The newly-enacted amendments broaden the Act’s scope and alter a number of requirements for New Jersey employers.
Employers who may be impacted should familiarize themselves with the details of these amendments, which are in addition to the existing requirements under the federal WARN Act.
The following are five of the most important changes to consider.
1. Extended Notice Requirements: Under the original NJ WARN Act, covered employers were required to provide 60 days’ notice to affected employees before implementing a mass layoff or termination or transfer of operations. The amended Act extends the notice period to 90 days.
2. Mandatory Severance Pay: In the past, an employer was only required to pay severance as a penalty if it failed to provide the required notice. Beginning April 10, New Jersey employers must pay severance to all impacted employees regardless of compliance with the new 90-day notice period. The amount of severance is calculated as the employee’s regular rate over the last three years of employment or the final regular rate, whichever is higher. If the employer fails to provide the required 90 days’ notice, the employer must provide a further severance payment equal to four (4) weeks of regular pay. If an affected employee is entitled to severance under a separate employment contract or collective bargaining agreement, then the employer must pay either the contractual severance or the WARN Act severance, whichever is greater. (A lawsuit pending in New Jersey federal court is challenging this portion of the amendments on the grounds that the mandatory severance requirement is preempted by Federal law.)
3. Inclusion of Part-Time Employees: The original Act distinguished full-time employees from part-time employees. (Part-time employees were defined as employees who either work less than 20 hours a week or who have been employed for less than 6 months.). The amended Act eliminates the distinction between full-time and part-time employees, and now applies to employers with 100 or more employees, regardless of their full or part-time status. This expands the reach of the Act to include many more small businesses.
4. Lower Employee Threshold for Mass Layoffs: To constitute a mass layoff, termination of operations, or transfer of operations under the original NJ WARN Act, it had to result in the discharge of at least (a) 500 employees at the work establishment or (b) 50 employees representing at least 33% of the total workforce of the establishment. Effective April 10, 2023, employer obligations are triggered if a layoff in New Jersey effects at least 50 employees at an establishment, even if this falls below the 33% threshold. In addition, the amendments contain language stating that the 50-or-more-employees calculation must include those “reporting to” the establishment. While this remains an open issue that will likely be resolved through litigation, it may mean that remote workers may still be counted, even if they do not reside in New Jersey.
5. Broader Definition of “Establishment”: Previously, an employer’s “establishment” was defined as a “a single location or a 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 amended Act broadens this definition to include any “place of employment which has been operated by an employer for a period longer than three years” (except a temporary construction site).
Employers with employees in New Jersey that are planning to reduce their workforce should work closely with a trusted employment attorney to ensure compliance with the amended NJ WARN Act and minimize the chance of costly penalties. Please contact us with questions concerns at 973.707.3322 or LFarber@LFarberLaw.com.
The contents of this writing are intended for general information purposes only and should not be construed as legal advice or opinion in any specific facts or circumstances.