New Jersey Governor Phil Murphy signed Senate Bill 3170 into law, making several critical changes to New Jersey’s WARN Act, also known as the Millville-Dallas Airmotive Plant Job Loss Notification Act. Among other things, the amendments drastically expanded the definition of a “mass layoff,” increased the notice period from 60 to 90 days, and guarantees severance payments equal to one-week’s pay for each full year of employment to all affected employees. These amendments were initially scheduled to take effect on July 19, 2020. 

In response to the COVID-19 pandemic, however, on April 14, 2020, Governor Murphy signed Bill 2353 into law, deferring the effective date of the January amendments to 90 days after the termination of the Governor’s Executive Order declaring a state of emergency in New Jersey. More significantly, the April amendments revised the previously expanded definition of a “mass layoff” to exclude mass layoffs necessitated by a natural disaster or national emergency, including COVID-19. Consequently, the April amendments provide struggling employers with some form of relief in light of the significant challenges precipitated by COVID-19. A summary and analysis of the January and April amendments to the New Jersey WARN Act is provided below.

1. No Longer Site-Specific: The new amendment covers all terminations in the state, and removes references to site-specific locations within the state. Previously, the Act, like its federal WARN counterpart, only applied to terminations in a “single place of employment.”
2. Mass Layoff: A WARN notice is now required upon the termination of 50 or more employees “at or reporting to the establishment.” Prior to the Amendment, the notice requirement only applied where the layoff affected at least one-third of the employer’s full-time employees. The revised definition, thus, significantly expands the scope of the Act in two material ways: (a) by eliminating the distinction between full-time and part-time employees; and (b) by eliminating the requirement that the layoff affect at least one-third of an employer’s workforce.

3. Disasters and National Emergencies Excluded: The Act now contains an exception to the notice requirement for layoffs extending beyond the six-month period, which was the length of a layoff that rose to the level of a mass layoff triggering the statutory notice obligation, due to national emergencies or other unforeseen business circumstances. Even if 90 days’ notice is not possible, an employer must provide notice to the affected employees as soon as it becomes reasonably foreseeable that the layoff will last beyond the six-month period.

   Unlike the federal WARN Act, the prior version of the New Jersey WARN Act did not contain an exception for emergent circumstances. The 60-day notice requirement presented challenges for employers whose businesses were affected by the sudden and extreme impact of the COVID-19 pandemic. This particular amendment is effective immediately and is retroactive to March 9, 2020 — the same date Governor Murphy signed the Executive Order declaring a state of emergency in the state. As a result, there can be no question that mass layoffs engendered by the pandemic do not trigger the 90-day notice requirements under the Act even if it does not specify whether COVID-19 qualifies as a “national emergency.”

4. Expanded Notice Requirement: The amendments increased the notice period and requires employers to provide at least 90 days of advance notice to affected employees, the Commissioner of Labor and Workforce Development, the municipality’s chief elected official, and representatives of collective bargaining units. Previously, the notice period was 60 days.

5. Mandatory Severance: Employers must now pay affected employees one week’s severance pay for each full year of employment by the next regular payday. The amount of severance pay is the greater of the employee’s regular rate over the last three years or final regular rate.

   Previously, employees were only entitled to severance pay if the employer failed to comply with the mandatory 60-day notice requirement. Under the new amendment, however, an employer who fails to provide employees with the required notice must pay an additional four weeks of pay to each employee who was provided with less than 90 days of notice.

6. Waiver and Release: Because severance is guaranteed under the Act, employers cannot obtain a waiver of any severance payments without approval by the Commissioner of the Department of Labor or a competent court.