Legal Blogs and Updates

Employers engaging in a mass layoff, transfer or a plant closure must ensure compliance with the federal Worker Adjustment and Retraining Notification Act (WARN Act) as well as the New Jersey Millville Dallas Airmotive Plant Job Loss Notification Act (a.k.a. the NJ WARN Act).

 

On January 21, 2020, Governor Murphy signed Senate Bill 3170 into law, which significantly expands the NJ WARN Act to make it more onerous for certain employers, and more stringent than the federal WARN Act. In fact, the New Jersey law will be the most expansive WARN Act in the nation. The amended law is scheduled to take effect July 19, 2020.

 

The amended NJ WARN Act-perhaps true to its name-bolsters the requisite warning (notice) period from 60 days to 90 days if the employer initiates a "transfer," "termination of operations" or "mass layoff" impacting 50 or more employees within a 30-day period. Such notice is to be provided to the New Jersey Commission of Labor and Workforce Development, the chief elected official of the municipality where the employer is located, each impacted employee, and any union of the impacted employees.

 

Additionally, all employees affected by such a decision must be paid one week severance for each year of employment they had with that company. Should the employer not provide the mandated 90 days' notice to the impacted employees, the employer must pay those employees four additional weeks' severance pay. The rate of pay shall be the average regular rate of compensation received during the employee's last three years of employment with that employer or the final regular rate of compensation paid to the employee, whichever is higher.

 

The amended NJ WARN Act expressly prohibits a waiver by an employee of the notice and severance requirements without the approval from a court of law or the New Jersey Department of Labor.

 

The employer must have 100 or more employees for the NJ WARN Act to apply. However, per the amendment to the NJ WARN Act, both full-time and part-time employees will count toward the minimum 100 employee threshold required to trigger an employer's responsibilities under the law. This marks a significant change, as previously only full-time employees were counted to determine if the 100 employee threshold was met.

 

In addition, the text of the amended NJ WARN Act expands the definition of an "employer" as follows: "any individual, partnership, association, corporation, or any person or group of persons acting directly or indirectly in the interest of an employer in relation to an employee, and includes any person who, directly or indirectly, owns and operates the nominal employer, or owns a corporate subsidiary that, directly or indirectly, owns and operates the nominal employer or makes the decision responsible for the employment action that gives rise to a mass layoff subject to notification." Thus, neither contract nor formation can side-step the law.

 

Employers are well-advised to confer with legal counsel when contemplating (and well before implementing) a mass layoff, transfer or a plant closure to ensure compliance with the amended NJ WARN Act, the federal WARN Act and other laws.