New Jersey Delays Amendments to the New Jersey WARN Act and Provides Relief to Employers Amid the COVID-19 Pandemic
New Jersey employers facing difficult decisions given business challenges posed by the COVID-19 pandemic have been hoping for some relief from the amendments to New Jersey’s Millville Dallas Airmotive Plant Job Loss Notification Act (NJ WARN Act), set to take effect on July 19, 2020. Simply put, those amendments will lower the bar such that the NJ WARN Act will be triggered by reductions in force that impact 50 or more employees (either full-time or part-time) at or reporting to an establishment (a single location or group of locations within the state) during any 30-day period. In addition, the amendments require employers who lay off employees on or after July 19, 2020, to give employees 90 days’ notice, rather than the 60 days previously required by state law and by the federal Worker Adjustment and Retraining Notification (WARN) Act.
However, most significantly, the amended NJ WARN Act requires that employers pay mandatory severance to all laid-off works in an amount equal to one week of pay for every full year of employment, regardless of whether advance notice is provided – this mandatory severance is in addition to any severance that an employer may pay to employees to seek a general release of claims typical of severance provided as part of a reduction in force. See our previous article discussing the sweeping changes to the NJ WARN Act in more detail.
The N.J. Chamber of Commerce and other employer groups had been seeking relief from these anticipated NJ WARN Act amendments amid the pandemic, similar to the “unforeseen business circumstances” exception to the federal WARN Act, given the federal, state and local government shutdown and shelter-in-place orders caused by the COVID-19 pandemic. In response, on April 13, 2020, the New Jersey Legislature unanimously passed Senate Bill 2353, excluding mass layoffs due to the novel coronavirus from the severance payment obligations under the recently amended NJ WARN Act. On April 14, Governor Murphy signed the bill into law.
Provisions of the NJ WARN Act
Senate Bill 2353 clarifies that a “mass layoff” triggering the NJ WARN Act does not include a mass layoff made necessary due to a fire, flood, natural disaster, national emergency, act of war, civil disorder or industrial sabotage, decertification from participation in the Medicare and Medicaid programs or license revocation. The exclusion of mass layoffs due to a natural disaster or national emergency, such as the COVID-19 pandemic, from the definition of a “mass layoff” under the NJ WARN Act is effective immediately and retroactive to March 9, 2020.
In addition, the new law postpones the effective date of the prior amendments – namely the increase of the notice period from 60 days to 90 days and the mandatory severance payments referenced above – until 90 days following the termination of Governor Murphy’s Executive Order 103 of March 9, 2020, declaring a public health emergency in the state of New Jersey. Currently, Executive Order 103 has already been extended through May 7, and may be extended again by order of the governor.
The enacted Senate Bill 2353 provides much-needed relief to New Jersey employers and, as referenced above, aligns the NJ WARN Act with the federal WARN Act, which also provides an exception for employment losses caused by a natural disaster.