You’ve Been WARNed! Amendments to the New Jersey WARN Act May Soon Go Into Effect

By: By: Lewis Brisbois' Labor & Employment Team

On January 21, 2021, New Jersey Governor Philip Murphy signed into law sweeping amendments to the New Jersey WARN Act, which could soon become the most expansive business closing/mass-layoff notification law in the nation and the first to impose mandatory severance pay to affected employees. While officially known as the “Millville Dallas Airmotive Plant Job Loss Notification Act,” the law is generally referred to as the “NJ WARN Act” in reference to the parallel federal Worker Adjustment Retraining and Notification (WARN) Act. 

New Jersey employers were granted a brief reprieve from the impact of these amendments during the height of the COVID-19 pandemic, with the effective date delayed until 90 days after the end of the ongoing public health emergency. However, the state of emergency is set to expire on June 13, 2021, and Governor Murphy has signaled no intent to extend the effective date further. Because the amendments could thus go into effect as early as September 11, 2021, employers are encouraged to become familiar with the new requirements. The key features are as follows: 

Severance Pay: Employers conducting a mass layoff or transfer or termination of operations will now be required to provide severance pay equal to one week of pay for each full year of employment to each affected employee.  

Notice Period: The law will require that employers provide 90 days’ notice of a mass layoff or transfer or termination of operations to all affected employees. Failure to do so will entitle employees to four weeks of additional severance pay. 

Mass Layoff: The amendments substantially broaden the definition of “mass layoff” to include the termination of 50 or more employees at any “establishment” during any 30-day period.

Establishment: All of an employer’s New Jersey facilities are now considered one aggregated “establishment” for purposes of determining whether a “mass layoff” has occurred. 

Stay Tuned! A lawsuit is presently pending before the United States District Court for the District of New Jersey seeking to enjoin enforcement of these amendments on the grounds that they are preempted by the Employee Retirement Security Act of 1974 (ERISA). This lawsuit was filed by The ERISA Industry Committee against the Commissioner of the New Jersey Department of Labor and Workforce Development. On May 20, 2021, the court denied the state’s motion to dismiss. The plaintiff’s motion for summary judgment is to be decided in the near future. If it is granted, the amendments will be enjoined and will not go into effect; however, the state would certainly appeal any such ruling. Prospects for success in this suit are far from certain.

For more information on the NJ WARN Act, contact the author of this post. Subscribe to this blog to receive email alerts when new posts go up.

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