By: Ty Hyderally, Esq., Jennifer Vorih, Esq., and Adela Barbura

In August 1998, Congress passed the Worker Adjustment and Retraining Notification Act (“WARN Act”) to “provide workers with sufficient time to seek other employment or retraining opportunities before closing their jobs,” as well as to “ensure advance [and sufficient] notice in cases of qualified plant closings and mass layoffs.” See WARN Advisor, U.S. Dep’t of Lab., https://webapps.dol.gov/elaws/eta/warn/i2.asp# (last visited Dec. 6, 2023) and 20 C.F.R. § 639.1(a). Congress highlighted the importance of early intervention in the successful re-employment of laid-off individuals.

Although most states simply follow the regulations set forth in the federal WARN Act, almost ten states have enacted their own versions of the WARN Act – commonly referred to as “mini-WARN Acts.” These mini-WARN Acts expand upon the federal WARN Act and broaden the Act’s coverage to include smaller employers and lower layoff thresholds. In particular, New Jersey’s newly amended WARN Act contains one of the most expansive regulations which, in turn, creates greater protections for qualifying New Jersey employees.

On January 10, 2023, Governor Phil Murphy signed new legislation (Senate Bill 3710) which implemented expansive amendments to New Jersey’s WARN Act. These amendments increase the number of covered employers who must follow the WARN Act’s notice regulations, while granting greater protections and severance pay to a larger pool of employees affected by mass layoffs or plant closings. These amendments went into effect April 10, 2023. The key amendments are highlighted below:

• Notice Period Extended to 90 days

Prior to the 2023 amendments, New Jersey employers were required to provide New Jersey employees with only 60 days’ advance notice of mass layoffs or plant closings, which is consistent with the federal WARN Act. The amended law now requires employers with 100 or more employees nationwide to provide 90 days’ advance notice.

Additionally, employers now have only one exception to the 90 days’ advance notice: the employers may terminate employees without providing the 90 days’ notice only if the mass layoff or plant closing is the result of a natural disaster (flood, fire, or other emergency). This is far more restrictive than the federal WARN Act.

• Lower Threshold for Layoffs and Abolishing Distinction Between Part-Time and Full-Time Employees

The amended NJ WARN Act lowers the “mass layoff” threshold for when an employer is required to provide 90 days’ advance notice to employees. Previously, employers were required to provide notice only when (i) are least 500 full-time employees or (ii) at least 50 full-time employees representing one-third of the workforce at the establishment, were terminated. Now, the notice requirement is triggered by the termination of only 50 employees, regardless of whether they are full-time or part-time employees. The amended Act completely abolishes the distinction between part-time and full-time employees, therefore protecting all qualifying New Jersey employees who are terminated by a mass layoff or plant closing.

This is a massive win for part-time employees in New Jersey who may be terminated in mass layoffs, as they are now afforded protections under the amended NJ WARN Act. Unlike New Jersey, most other states’ mini-WARN Acts and the federal WARN Act still exclude part-time workers from these advance notice protections. Of course, part-time employees – particularly those with multiple part-time jobs — need their income at least as much as full-time workers do.

• Definition of “Establishment” Expanded

The amended NJ WARN Act also broadened the definition of “establishment” to “a single location or a group of locations, including any facilities located in [the state of New Jersey]” which the employer has operated for longer than 3 years. This expansive definition now requires employers to aggregate terminations at all of their locations or facilities within New Jersey. Because of the new aggregation principle, terminations of large numbers of employees will now be more likely to trigger the protections of the NJ WARN Act.

For example, an employer who lays off 5 employees at their northern New Jersey facility and 45 employees at their central New Jersey facility will trigger the 50-employee threshold and severance requirements of the new NJ WARN Act. This prevents employers from utilizing the loopholes in the original Act, i.e., if an employer wished to lay off 500 full-time employees, the employer could have strategically avoid triggering the NJ WARN Act by terminating 250 from the northern New Jersey establishment and another 250 from the central New Jersey establishment.

Not only can the Act’s protections be triggered by terminating 50 employees working anywhere in New Jersey, but the Act’s expansive definition of “mass layoff” allows for the aggregation of employees who do not work at the establishment, but who “report to” a New Jersey establishment. Based on this language, it can be argued that remote workers who work out of state but report to an employer’s New Jersey location may be counted toward the 50-employee threshold.   Unfortunately, the Act provides no clear guidance as to whether employers are required to count remote workers who do not reside in New Jersey.

• Mandatory Severance Pay

Prior to the amendments, qualifying employers were required to pay severance to employees terminated in layoffs or terminations only if the employer failed to provide advance notice. Now, regardless of whether employers give advance notice, the amended law requires employers who conduct a “transfer, termination of operations, [or] mass transfer” to provide every affected employee “severance pay equal to one week of pay for each full year of employment.” In other words, employers who provide timely notice about mass layoffs or plant closings are still required to provide mandatory severance pay. This is a huge win for New Jersey employees who are left unemployed by mass layoffs. In fact, New Jersey is the only state to require mandatory severance pay for all employees terminated in qualifying layoffs, transfers of operations, or terminations of operations.

The Act goes further to require that if an employer fails to provide 90 days’ advance notice, the employer must provide each employee who did not receive sufficient notice “with an additional four weeks of [severance] pay.”

These expansive amendments highlight New Jersey’s move toward providing more protections for New Jersey employees and demonstrate New Jersey’s dedication to protecting the unemployment compensation rights and other rights of workers affected by mass layoffs or plant closings.

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