Attention Required: Amendments to the New Jersey Mini-WARN Act Will Go Into Effect Shortly
On January 10, 2023, New Jersey Governor Phil Murphy signed Assembly Bill No. 4768 allowing amendments (the “Amendments”) to the New Jersey Millville Dallas Airmotive Plant Job Loss Notification Act (“NJ WARN”) to go into effect on April 10, 2023 (90 days from signing). The Amendments were originally passed nearly three years ago, but have not gone into effect due to the COVID-19 pandemic and the ongoing state of emergency originally declared in March 2020. With the passage of this bill, however, the State decided to decouple the Amendments from the state of emergency, which still remains in effect, to allow the Amendments to formally go into effect.
NJ WARN requires covered employers to provide notice in advance of various triggering events, such as “termination of operations” and “mass layoffs.” As we initially reported when the Amendments were originally passed, the Amendments differ from the previous law and strengthen NJ WARN in several significant respects.
Who is covered by the Amendments?
NJ WARN still exempts employers with less than 100 employees from coverage. The existing law, however, counts only “full time” employees in determining the 100 employee threshold. Pursuant to the Amendments, all employees, regardless of tenure or hours of work (so long as the employer has operated in New Jersey for more than three years), must be counted in the 100 employee threshold. Similarly, part-time employees must be counted towards the 50 employee thresholds for the triggering events denoted below and are now treated the same as full-time employees for purposes of notice and severance pay.
What are the new notice requirements?
Employers with 100 or more employees must now provide at least 90 days’ notice to affected employees before terminating the first employee as part of a mass layoff, termination of operations, or transfer of operations. Under existing law, only 60 days’ notice is required.
What do the Amendments require in terms of severance?
Employers must now provide discharged employees with severance pay equal to one week of pay for each full year of employment, even when the required 90 days’ advance notice is given. If an employer fails to provide at least 90 days’ notice, an additional four weeks of severance will be owed to those affected employees who did not receive the requisite notice. If employees are entitled to severance under a separate agreement, such as a collective bargaining agreement (“CBA”), employers may offset the amounts owed, but employees are still entitled to the greater of the two amounts. Under existing law, employers are only required to pay severance as a penalty if they failed to provide the prescribed notice.
What are triggering events under the Amendments?
Under the existing NJ WARN requirements, a covered “mass layoff” is the discharge of at least 500 employees at an establishment or a minimum of 50 full-time employees representing at least 33% of the employer’s total workforce at the establishment. The Amendments eliminate these thresholds, so now a covered “mass layoff” constitutes layoffs impacting at least 50 employees (regardless of full-time or part-time status) at or reporting to an establishment, even if less than 33% of employees at the establishment are affected.
Currently, NJ WARN is also triggered when there is either a permanent or temporary shutdown of an establishment that results in the termination of at least 50 full-time employees during a period of up to 30 days (i.e., a “termination of operations”) or a permanent or temporary transfer of a single establishment to another location that results in the termination of 50 or more full-time employees during a period of up to 30 days (i.e., a “transfer of operations”). As noted above, part-time employees are now counted towards the aforementioned 50 employee thresholds.
What is an “establishment” under the Amendments?
Under existing NJ WARN, an “establishment” is defined as “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 Amendments expand the definition to include “a single location or a group of locations, including any facilities located in” New Jersey. Therefore, employers must aggregate employees at all of their New Jersey locations to determine if one of the above triggering events will occur.
Any terminations of employment that are covered under NJ WARN that occur on or after April 10, 2023, based on the effective date of the termination, will be subject to the Amendments. Terminations that occur before that date are subject to the current version of the statute.
Clearly, the Amendments will have serious implications for any New Jersey employer facing a significant reduction in their workforce. Employers should speak with counsel regarding the Amendments and factor the new requirements into any decision-making processes for employee layoffs in New Jersey.
As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice. For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.