A Comprehensive Guide to the NJ WARN Act Amendments
On April 10, 2023, the amendments to the Millville Dallas Airmotive Plant Job Loss Notification Act (NJ WARN Act) will come into effect. These amendments, which were put on hold during the COVID-19 pandemic, will impose new requirements on employers of 100 or more who implement mass layoffs or plan closures. In this article, we will provide a comprehensive guide for NJ employers about the amendments to the NJ WARN Act, including their expanded applicability, notice obligations, mandatory severance, and lower thresholds for mass layoffs. We will also discuss the impact of these amendments on employers.
What is the NJ WARN Act?
The Millville Dallas Airmotive Plant Job Loss Notification Act, also known as the NJ WARN Act, was enacted in 2007 to protect workers and communities from the negative impact of mass layoffs and plant closures. The NJ WARN Act requires covered employers to provide advanced notice to employees, employee representatives, and certain government officials before implementing a “mass” layoff, termination of operations, or transfer of operations.
Key Takeaways for NJ Employers
The NJ WARN Act amendments are more comprehensive than the original Act and the federal WARN Act, imposing significant obligations on New Jersey employers. Employers should consider the following key takeaways:
The NJ WARN Act currently applies to employers with 100 or more full-time employees. However, under the amendments, the Act will now apply to employers with 100 or more employees, regardless of their full or part-time status. This change will result in many more small businesses being covered under the Act.
Under the existing NJ WARN Act, covered employers are only required to provide 60 days’ notice to affected employees before implementing a “mass” layoff, termination of operations, or transfer of operations. The amendments extend the notice period to 90 days. An employer who fails to provide 90 days’ notice will be required to provide each affected employee with an additional four weeks of severance, above and beyond the new mandated severance discussed below.
Under the existing NJ WARN Act, employers are only required to pay severance as a penalty if the employer fails to provide the required notice. However, the new amendments require New Jersey employers to provide discharged employees with one week of severance pay for each full year of employment, even if the proper advance notice was provided. The rate of severance is calculated as the employee’s regular rate over the last three years of employment or the final regular rate, whichever is higher. In the event the employee is subject to a collective bargaining agreement or employee agreement that addresses severance, the new law requires the employer to pay the greater of the amount set forth in the Act or in the respective agreement.
Lower Threshold for Mass Layoffs
To constitute a “mass” layoff under the existing NJ WARN Act, the layoff must result in the discharge of at least: (1) 500 employees at the establishment or (2) 50 employees representing at least 33% of the total workforce of the establishment. However, under the amendments, NJ WARN Act obligations are triggered by any layoff impacting 50 employees, even if 50 is below the 33% threshold.
The recent amendments state that when calculating the number of employees, it’s not just the employees working at a New Jersey establishment that should be counted, but also those who “report to” the establishment. This means that remote or field employees who report to a New Jersey location must be included in the count of 50 or more employees for a triggering event.
The new NJ WARN Act amendments will impose significant obligations on New Jersey employers.
Employers must be aware of the expanded applicability of the Act and ensure compliance with the new notice and severance requirements. The lower threshold for mass layoffs also means that employers must carefully evaluate their workforce and anticipate when the NJ WARN Act obligations may be triggered. Failure to comply with the Act can result in significant liability, including statutory penalties, attorney fees, and other damages.
Employers who implement mass layoffs or plan closures in New Jersey should seek guidance from experienced employment counsel to ensure compliance with the amended NJ WARN Act. It’s also essential for employers to review their existing employment policies and procedures to ensure that they are in line with the new requirements.
Conclusion The NJ WARN Act amendments will go into effect on April 10, 2023, imposing new requirements on employers of 100 or more who implement mass layoffs or plan closures. The amended Act expands its applicability, increases notice obligations, requires mandatory severance, and lowers the threshold for mass layoffs. Employers must ensure compliance with these new requirements to avoid potential liability.
- What is the NJ WARN Act? The NJ WARN Act, also known as the Millville Dallas Airmotive Plant Job Loss Notification Act, is a New Jersey state law that requires employers to provide advance notice to employees of a mass layoff or plant closure.
- When will the new NJ WARN Act amendments take effect? The amendments to the NJ WARN Act will take effect on April 10, 2023.
- Which employers are covered by the NJ WARN Act? Under the amended NJ WARN Act, employers with 100 or more employees, regardless of their full or part-time status, are covered.
- What are the notice obligations under the NJ WARN Act? Under the amended NJ WARN Act, employers are required to provide 90 days’ notice to affected employees before implementing a mass layoff, termination of operations, or transfer of operations.
- What are the consequences of non-compliance with the NJ WARN Act? Employers who fail to comply with the NJ WARN Act can face significant liability, including statutory penalties, attorney fees, and other damages.