New Jersey Gives Employers Struggling with the COVID-19 Pandemic a Temporary Break: Delay and Changes to the Amended New Jersey WARN Act

In response to growing concerns of employers due to the COVID-19 pandemic, on April 14, 2020, Governor Phil Murphy signed into law new legislation (S-2353) (“April 14th Amendment”), which provides two significant changes to the Millville Dallas Airmotive Plant Job Loss Notification Act (NJ WARN), which the Governor signed into law (S-3160) on January 21, 2020. Pursuant to the January 21st changes, initially scheduled to become effective on July 19, 2020, employers will be required to provide longer notice periods and mandatory severance pay in connection with a large layoff or facility closure.

NJ WARN Act

NJ WARN currently requires employers with 100 or more full-time employees to provide 60 days’ advance notice prior to a mass layoff, or a termination or transfer of operations that results in the termination of employment of 50 or more full-time employees. Under the current law, a “mass layoff” is the termination of employment within a 30-day period, and for which the employer does not make a commitment to reinstate within six months, either of the following: (1) 500 or more full-time employees; or (2) 50 or more full-time employees, which represent 33% or more of the full-time employees at the establishment at issue.

The April 14th Amendment

The April 14th Amendment creates an exception to an employer’s notice obligation for mass layoffs that are necessary because of a fire, flood, natural disaster, national emergency, act of war, civil disorder, industrial sabotage, or decertification from participation in Medicare and Medicaid programs. This change mirrors the exception to an employer’s notice obligation, currently included in the definition of an employer’s “termination of operations.”

The exceptions to an employer’s notice obligation for a mass layoff became effective with the Governor’s signature and are retroactive to March 9, 2020. The April 14th Amendment’s new language does not explicitly reference the COVID-19 pandemic. However, the timing and the legislative history of the April 14th Amendment makes it clear that COVID-19 is intended to be an exception to an employer’s notice obligations for a mass layoff. For example, the bill’s synopsis explains that the purpose of the proposed legislation is to address “mass layoffs resulting from coronavirus disease 2019 pandemic.”

The April 14th Amendment also delays the July 19, 2020 effective date of the January 21st changes to NJ WARN. As a result, the January 21st amendments will not become effective until 90 days after the conclusion of the current State of Emergency declared by Governor Murphy through Executive Order No. 103.

The January 21st amendments to the NJ WARN, when effective, will require as follows:

1. Cover all employers with 100 or more employers, regardless of the number of hours the employees work;
2. Extend the required notice period from 60 to 90 days;
3. Guarantee severance to employees laid off because of a covered event in the amount of one week’s pay for every year the employee worked for the employer (which can be increased by an additional four weeks’ pay if the employer fails to provide proper notice);
4. Apply to layoffs that result in the termination of 50 or more employees at, or reporting to, an establishment within any 30-day period regardless of whether the 50 employees constitute one-third of the establishment’s employees;
5. Expand the definition of an “establishment” to encompass multiple non-contiguous sites and employees at jobsites reporting to the location; and
6. Require approval from the New Jersey Department of Labor and Workforce Development or a court in order for an employer to obtain a valid waiver of an employee’s NJ WARN rights.

Bottom Line

Employers considering continued layoffs or reductions in force should take this opportunity to ensure that their Human Resources Department’s practices are up to date with the many changes in this developing area of the law. For more information regarding this and other developments impacting an employer’s ability to facilitate a RIF, please contact John R. Vreeland, Esq., Partner in the firm’s Wage and Hour and Labor Law Practice Groups at jvreeland@genovaburns.com or Paul H. Mazer, Esq. at pmazer@genovaburns.com or 973.533.0777.