Employers in the Garden State Now Subject to Most Expansive Warn Act in the Nation

On January 21, 2020, Governor Murphy signed into law Senate Bill 3170, the most expansive WARN Act in the nation. This law emanated from last year’s closure of Toys R Us, which left 2,000 New Jersey employees unemployed.  The bill amends the Millville Dallas Airmotive Plant Job Loss Notification Act (“NJ WARN” or the “Act”). Here are the key provisions of this new law:

• The Act shall be effective July 19, 2020.
• NJ WARN still exempts “small employers” (those with less than 100 employees) from coverage. However, the previous law only counted “full time” employees in determining the 100 employee threshold. Now, all employees are counted, thus covering more employers.
• The Act requires advance written notice to all affected employees (full or part-time) whenever there is a “transfer”,  “termination of operations” or a “mass layoff.” In reworking the definition of “mass layoff,” NJ WARN eliminated (i) the prior rule that such terminations had to occur at a “single” “site of employment,” (ii) the rule that does not count part-time workers toward the requisite 50 employees (the only exception to this rule is the termination of “seasonal employees,”  although that term is not defined); and (iii) the rule that 33 percent of the workforce has to be affected.
• The Act now requires 90 days advance written notice (instead of 60 days) where the law is triggered.
• Upon the triggering of notice, a covered employer that gives notice must still pay all terminated employees severance of 1 week for every year of employment. If an employer does not provide the requisite notice it must pay employees an additional 4 weeks’ severance pay. This is the first law in the country to provide for notice and severance pay.
  
• In the event where an employer seeks to have an employee waive his/her right to severance pay, court or New Jersey Department of Labor approval must be obtained.  Employers should note that where they wish to obtain a release of NJ WARN claims, they must provide employees with additional consideration.

Employers considering any reductions in force are well advised to consult counsel in advance to ensure compliance with NJ WARN and other related laws.