New Jersey: Major Changes Coming to Mini-WARN Act!

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April 10, 2023

  

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Key Takeaways

  • More New Jersey employers will have to comply with the state Mini-WARN Act when planning mass layoffs.
  • Changes to the Act also include mandatory severance.
  • Violations of the Act could result in a requirement to pay additional severance and compensatory damages which can include lost wages, benefits, and other remuneration plus attorney’s fees and costs.

Discussion

AB A4768 creates significant changes to New Jersey’s Millville Dallas Airmotive Plant Job Loss Notification Act (NJ WARN). The changes were put on hold due to the COVID-19 pandemic and the declared state of emergency. However, New Jersey legislators removed the link between the state of emergency and the pause on the amendments thereby accelerating the effective date of the changes. NJ WARN applies to employers with 100 or more employees located anywhere in the United States as long as the employer has operated in New Jersey for more than three years. There are five important changes employers planning mass reductions in force should note:

Notice. Employers with 100 or more employees will be required to provide 90 days’ advance notice to affected employees prior to the discharge of the first employee. Currently, notice must be provided 60 days in advance.

Mandatory Severance. Employers will be required to provide discharged employees with severance pay equal to one week of pay for each full year of employment. Currently, severance is only paid as a penalty for failure to provide advance notice of mass layoff, termination of operations, or transfer of operations. A waiver to severance pay will not be effective without approval by the commissioner or a court of common jurisdiction. This would have significant impacts to severance agreements that also seek a release of claims. Note that there is a pending legal challenge to the severance requirement.

Lowered Threshold for Mass Layoff Definition. A covered mass layoff will trigger NJ WARN if, during any 30-day period, it impacts at least 50 employees at or reporting to an establishment even if less than 33% of the employees are impacted. Currently, the threshold is 500 employees at the establishment or 50 employees representing at least 33% of the total workforce of the establishment.

Part-Time Employees. Part-time employees will soon be counted in both the 100-employee threshold for covered employers and 50-employee threshold for termination of operations or a mass layoff. Part-time employees will also receive advanced notice and severance pay.

Definition of Establishment. An establishment can be a single location or a group of locations, including facilities located in the state. Employers will need to aggregate all of their locations in New Jersey to determine if the 50-employee threshold is met.

Action Items

  1. Review the AB A4768
  2. Have appropriate personnel trained on new requirements.
  3. Review reductions in force with legal counsel for compliance.
  4. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2023 ManagEase