The New Jersey WARN Act (“NJ WARN Act”) generally imposes certain obligations on employers before conducting a mass layoff or plant closure. Back in January of 2020, New Jersey made several amendments to the NJ WARN Act; however, the effective date of those amendments was put on hold because of the state of emergency declared in Executive Order 103, which was caused by the COVID-19 pandemic. Nearly three years later, Governor Phil Murphy signed Assembly Bill No. 4768 on January 10, 2023, permitting the amendments to take effect on April 10, 2023.
The amendments to the NJ WARN Act include the following:
Expanded Notice Requirement: Employers must now provide impacted employees with 90 days’ notice of a workplace shutdown or mass layoff as opposed to the previously required 60 days’ notice.
Mandatory Severance Pay: Employers are required to provide all affected employees with one week of severance pay for each full year worked, regardless of whether the employer provides 90 days’ notice. If an employer does not provide 90 days’ notice, the employer is required to pay an additional four weeks of severance pay. The severance pay requirement may not be waived without court or agency approval.
Broader Definition of Mass Layoff: A mass layoff is now defined as a termination impacting at least 50 employees at an establishment, regardless of the percentage of the total workforce at the establishment. Previously, the threshold was either (1) 500 employees or (2) 50 or more employees comprising 33% of the total workforce at an establishment.
Elimination of Full-Time/Part-Time Employee Distinction: Part-time employees, who were previously excluded under the NJ WARN Act, are now counted towards both the threshold required for a covered employer (100 employees) and the threshold required for a mass layoff (50 employees). For instance, employers with 100 or more employees (including both full-time and part-time employees) are now covered by the Act.
Expanded Definition of Establishment: A covered “establishment” now includes all facilities located in the state, instead of a single site of employment.
Legal challenges to these new amendments have been unsuccessful. A recent lawsuit filed in federal court in New Jersey attempting to halt the implementation of these amendments to the NJ WARN Act was dismissed on April 6, 2023. The ERISA Industry Committee, a non-profit organization that lobbies on behalf of the largest employers in the U.S., sued the New Jersey Department of Labor, claiming the new law is too burdensome and preempted by the federal WARN Act. However, U.S. District Court Judge Zahid Quraishi granted the Department of Labor’s Motion for Summary Judgment and dismissed the suit because the ERISA Industry Committee lacked standing.
The Key Takeaway: Employers must be aware of the new obligations imposed by these amendments and must plan accordingly when terminating a group of employees which could constitute a mass layoff or a workplace shutdown under the NJ WARN Act.
The author thanks Summer Law Clerk Madeline Humphrey for her assistance with this article.
