Amendments to NJ WARN Act
Finally some good news for New Jersey employers as our Legislature continues to address the COVID-19 pandemic. Yesterday, both houses of the New Jersey Legislature unanimously voted to amend the Millville Dallas Airmotive Plant Job Loss Notification Act, N.J.S.A § 34:21-1 to -7 (the “NJ WARN Act”). The amendment will relieve certain New Jersey employers from some of the statute’s obligations as a result of COVID-19 once signed by Governor Murphy .
What is the Millville Dallas Airmotive Plant Job Loss Notification Act?
In a recent Client Alert, we discussed the NJ WARN Act, which imposes requirements upon certain employers conducting “mass layoffs” and qualified cessations of operation. The statute is particularly significant in light of the COVID-19 pandemic because, as of April 10, 2020, certain employers were obligated to provide:
- 60 days’ notice before conducting a mass layoff, or before transferring or shutting down an establishment (even if temporarily), if those actions would result in qualifying terminations of employment; and
- “each full-time employee whose employment is terminated and to whom the employer provides less than the number of days of notification required . . . severance pay equal to one week of pay for each full year of employment,” “in addition to any severance pay . . . pursuant to a collective bargaining agreement or for any other reason,” N.J.S.A. § 34:21-2(b).
However, amendments to the NJ WARN Act — which became law in January 2020 and which were to become effective July 19, 2020 — have:
- widened the net of employers to which the statute applies;
- expanded the scope of mass layoffs and cessations of operations that require notice;
- increased the notice period from 60 to 90 days; and
- increased employers’ obligations with regard to severance pay by requiring that employers provide:
- “severance pay equal to one week of pay for each full year of employment” to any “employee whose employment is terminated,” S. 3170, § 2; and
- “an additional four weeks of pay” to those employees who were provided “with less than the number of days of notification required,” S. 3170, § 2.
New Amendment to the Millville Dallas Airmotive Plant Job Loss Notification Act
Yesterday, the New Jersey Legislature voted to amend the NJ WARN Act to address “mass layoffs" due to the coronavirus disease 2019 pandemic. S2353.
The NJ WARN Act now specifically excludes from the definition of “mass layoff” “mass layoff[s] made necessary because of . . . fire, flood, natural disaster, national emergency, act of war, civil disorder or industrial sabotage, decertification from participation in the Medicare and Medicaid programs as provided under Titles XVIII and XIX of the federal "Social Security Act," Pub.L. 74-271 (42 U.S.C. s.1395 et seq.) or license revocation pursuant to P.L.1971, c.136 (C.26:2H-1 et al.).” S2353, § 1. That is, whereas the NJ WARN Act previously only provided an exemption from the notice and severance pay requirements for plant shutdowns that were the result of, inter alia, a natural disaster or national emergency, the statute as amended exempts mass layoffs due to natural disasters or national emergencies from the notice and severance pay requirements, as well.
The Legislature has also delayed the effective date of the January 2020 amendments. Rather than becoming effective on July 19, 2020, the January 2020 amendments — which increased employers’ severance pay obligations — will “take effect on the 90th day next following the termination of Governor Murphy’s Executive Order 103.” S2353, § 2.
Significantly, the amendments will become effective immediately upon Governor Murphy’s signature. Additionally, the amended definition of “mass layoff” is retroactive to March 9, 2020.
Please note that application of the NJ WARN Act requires a fact-sensitive analysis. This Alert is not intended to be legal advice for any particular situation, and it should not be construed as such.
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