Employers already know that, anytime a mass layoff or plant closing is contemplated, there are significant federal and New Jersey state law notice requirements. This past January, 2020, Governor Murphy signed into law a radical legislative amendment to the New Jersey WARN Law (known officially as the “Millville Dallas Airmotive Plant Job Loss Notification Act”) that makes it the most costly and burdensome reduction in force law soon to be in force in the United States.
Beginning on July 19, 2020, the following drastic changes will be effective under the newly revised New Jersey WARN Law.
- The New Jersey WARN Law will be triggered by a termination of 50 or more employees, regardless of employee tenure or hours worked, and with the aggregation of all terminations across the state, no matter where in the state the termination occurred. Under this change, no longer will employers be able to ignore part-time employees in calculating the threshold number for coverage, and coverage is no longer limited by looking at only a single site of employment. The amendments also eliminate the previous requirement under the statute that a mass layoff would only occur if at least 33 percent of a workforce was affected.
- The required notice period under the NJ WARN Law will be 90, and not the current 60 days.
- Severance Pay will be automatic! This is the most radical of the changes made to the New Jersey WARN Law. Under the current law, severance pay was only required if the employer failed to provide the necessary 60 days’ notice. When the revised New Jersey WARN Law is triggered, employers must pay employees one week of severance for each year of employment! Where the employer has failed to meet the Law’s notice requirements, the severance obligation requires an additional payment of four more weeks on top of what is already statutorily required.
- Under the revised Law, the above required severance payments cannot be waived without state or court approval. So, any settlement of contested New Jersey WARN Law claims will need to receive either Court or state agency approval.
- The coverage of the New Jersey WARN Law has been expanded to include all employers with at least 100 employees, regardless of employee tenure or number of hours worked. Previously, employees with either less than six months of service, or who worked less than 20 hours per week, could be excluded from this threshold calculation. No more. The part of the Law that requires that an employer be in operation for at least three years thankfully remains unchanged.
In light of these sweeping changes to the NJ WARN Law, employers will now need to proceed with even greater caution when contemplating a possible plant closing, mass layoff, or even just a significant layoff. Employers must be aware of and adhere to these new requirements, especially those involving the timing for issuing the required notice and the making of required severance payments. Special precautions must also be followed when seeking a release of claims in connection with any type of covered reduction in force. When the New Jersey WARN Law is applicable, the employer will now have to pay employees more than just the statutorily required amount of severance to obtain an effective release of claim. This is because, to obtain a legally effective release, the employee must be given something by the employer beyond what an employee is already legally entitled to receive.
So, you have now been warned about the amended New Jersey WARN law! Please take these precautionary words to heart!
Ralph R. Smith, 3rd is Co-Chair of the Employment and Labor Practice Group. He practices in employment litigation and preventative employment practices, including counseling employers on the creation of employment policies, non-compete and trade secret agreements, and training employers to avoid employment-related litigation. He represents both companies and individuals in related complex commercial litigation before federal states courts and administrative agencies in labor and employment cases including race, gender, age, national origin, disability and workplace harassment and discrimination matters, wage-and-hour disputes, restrictive covenants, grievances, arbitration, drug testing, and employment related contract issues.