Amendment to New Jersey’s WARN Act, Imposing Stricter Requirements for Employers, Passes Committee

February 15, 2019 | By Joel Clymer, Ivo J. Becica

Shortly after New Jersey passed a substantial minimum wage increase, the state legislature remains busy, and a series of other employment laws are making their way through the state Assembly and Senate.  On February 7, 2018, the Senate Commerce Committee passed a new bill (S-3170) that would amend New Jersey’s Worker Adjustment and Retraining Notification (WARN) Act in several ways that would favor employees.

New Jersey’s existing WARN Act, the “Millville Dallas Airmotive Plant Job Loss Notification Act,”[1] was enacted in 2007, and applies to any organization (whether for- or non-profit) that employs 100 or more employees. The Act requires employers to provide 60 days’ notice of an anticipated temporary or permanent shutdown of its workplace(s) or a mass layoff that would result in an employment loss of at least 50 or more full-time employees.[2] An employer is considered to have closed a plant where it shuts down one or more of its facilities or operating units that will affect more than 50 workers and will last more than 30 days.  A “mass layoff” is defined as a reduction in force (which is not the result of a transfer or termination of operations) which results in termination of employment at a single place of employment (such as a plant or office park) during any 30-day period (i) for 500 or more full-time employees; or (ii) for “50 or more of the full-time employees representing one third or more of the full-time employees at the establishment.”

In order to comply with the existing Act, an employer must provide notice to each affected employee and any representative of an affected employee, the chief elected official of the unit of local government, and the New Jersey Commissioner of Labor and Workforce Development.[3] The notice must contain the following information:

  • The number of employees that will be laid off and the dates of the terminations;
  • A statement as to why the layoffs are happening;
  • A list of any employment available elsewhere for the employee by the employer;
  • A list of all of the employee’s rights in regards to severance, pensions, etc;
  • A disclosure of the amount of severance pay; and
  • A statement about the employee’s right to receive from the response team, any public programs, and their employee rights.[4]

The existing Act requires the payment of severance in the event an employer fails to meet the notice requirement. Severance can be reduced by any back pay awarded pursuant to the Federal WARN Act, which contains a 60-day prenotification requirement, and also awards backpay in the event of a violation.[5]

The new bill broadens the definition of “mass layoff” to all reductions in force that result in termination of 50 or more employees (either full- or part-time) at any group of locations within New Jersey.  It would require employers to provide notice of a workplace shut down or mass layoff at least 90 days in advance of the event. Moreover, an employer would be required to pay severance (equal to one week for each year of employment) to affected employees—regardless of whether proper notice is provided. Employers who fail to provide the required 90 days of notice would be required to pay an additional four weeks of severance.

The new bill also adds a new section that would restrict businesses with 50 or more employees from conducting layoffs of certain employees in the event of a “change of control,” such as a change of ownership.  During the 180-day “transition period” after a change in control, and for an additional two years after that transition period ends, covered successor employers would be prohibited from laying off any covered employees without the approval of the Commissioner of the Department of Labor.  Managerial, supervisory, confidential, temporary and part-time employees are not included in this requirement.

If passed, this new bill would impose new hurdles on New Jersey employers with at least 50 or 100 employees, and could change how employers handle layoffs and severance payments.  HR Legalist will be keeping a close eye on this proposal as it heads to the governor’s desk next.  In the meantime, employers with questions about how this bill may impact their operations and employment practices should speak with an attorney with experience in this area.

[1] The New Jersey Department of Labor and Workforce Development has published a summary of the Act along with a comparison of the federal WARN act, on its website at https://www.nj.gov/labor/lwdhome/warn/njwarn.html.

[2] See N.J.S.A. 34:21-1 (definitions) and 34:21-2 (notice requirement).

[3] N.J.S.A. 34:21-2(a).

[4] N.J.S.A. 34:21-3(a)-(f).

[5] 29 U.S.C. § 2102(a), 2104(a).

About the Authors

Joel Clymer

Joel Clymer

Associate

Joel Clymer focuses his practice primarily on commercial litigation, labor relations, and employment law. He has experience litigating employment discrimination cases from filing through trial, and has filed, argued, and prevailed on...

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Ivo Becica

Ivo J. Becica

Associate

Ivo is an attorney in Obermayer’s Labor Relations & Employment Law Department. He focuses his practice on representing employers, including advising companies on how to handle employee issues, and defending employee claims...

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