Last week, New Jersey Governor Phil Murphy signed an amendment to the New Jersey WARN Act, dramatically expanding the Act’s reach. Effective July 19, 2020, the amendment makes the Act one of the most stringent state WARN acts in the country.
Here are the key changes:
- WARN is now triggered by any termination of 50 or more full-time or part-time employees in New Jersey, whether at a single or multiple sites. Previously, the Act was triggered only if at least 33% of the workforce was affected at a single site of employment or 500 full-time employees are terminated in total. The Act also previously applied only to the termination of full time employees. And the kicker: An out-of-state transfer or a transfer to a site in New Jersey beyond 50 miles now qualifies as a “termination of employment” under the Act.
- Notice period increased from 60 days to 90 days. New Jersey employers covered by the Act now must provide 90 days’ notice of a termination.
- Severance mandated for all employees. Employees terminated as part of a WARN-covered event are now entitled not just to 90 days’ notice, but also to severance of 1 week for every year of employment. Employers cannot condition this severance on a release. If employers want a release, they will need additional consideration.
- Additional penalty for failure to comply. Employers who fail to comply with the required notice period are still required to issue back pay for the time the period of non-compliance. However, NJ employers now also must pay an additional 4 weeks of severance to each terminated employee if they fail to meet the notice period.
These are big changes that will affect how layoffs are conducted in New Jersey. New Jersey employers should consult counsel if there is a potential layoff on the horizon.