New Jersey’s WARN Act Amended to Provide Relief to Employers Conducting Mass Layoffs

Governor Phil Murphy signed a suite of new laws on April 14 in response to the coronavirus (COVID-19) pandemic, including an amendment to New Jersey’s WARN Act providing relief to employers that conduct mass layoffs as a result of the current crisis. This law takes effect immediately and is retroactive to March 9, 2020.

New Jersey Governor Phil Murphy signed legislation amending the Millville-Dallas Airmotive Plant Job Loss Notification Act (the New Jersey WARN Act) to impose stricter obligations on employers on January 21, 2020. The amended law, among other things,

• increased the required notice period for plant closings and mass layoffs from 60 days to 90 days,
• reduced the “mass layoff” minimum threshold to 50 employees at or reporting to an establishment,
• redefined “establishment” to include all of an employer’s facilities within New Jersey, and
• mandated severance payments so that an employer that conducts a “mass layoff,” “termination of operations,” or “transfer of operations” resulting in “termination of employment”[1] for at least 50 employees must pay each affected employee one week of severance for each full year of their employment, even if the employer provides the required 90 days’ notice.

The amended law was set to take effect on July 19, 2020, and presented daunting challenges and major unanticipated costs for employers in New Jersey.

Notice Exception for Mass Layoffs

At the prompting of a number of business and industry associations, on April 14 Governor Murphy signed into law Senate Bill 2353, which amends the definition of mass layoff to expressly exclude a mass layoff necessitated by “a fire, flood, natural disaster, national emergency, act of war, civil disorder or industrial sabotage, decertification from participation in the Medicare and Medicaid programs . . . or license revocation.” Because the COVID-19 pandemic has been declared a “national emergency,” mass layoffs that are necessitated by the pandemic should no longer trigger the New Jersey WARN Act’s advance notice and/or severance requirements.

This marks a sharp divergence from the prior version of the New Jersey WARN Act, which contained an exception in such circumstances for a “termination of operations” (analogous to a “plant closing” under the federal WARN Act) but not for a “mass layoff.”

Effective Date of New Jersey WARN Amendments Delayed

In welcome news to struggling employers, the bill also delays the effective date of the amended New Jersey WARN Act to the 90th day following the termination of the state of emergency declared in Governor Murphy’s March 9, 2020 executive order. Most importantly, this means that employers that have to conduct plant closings or mass layoffs in this period that are not caused by the national emergency must give 60 days’—not 90 days’—notice, and do not have to make severance payments so long as they comply with such notice requirements.

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Contacts

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

Princeton
August W. Heckman, III       
Terry D. Johnson
Thomas A. Linthorst
Sean P. Lynch
Joseph A. Nuccio
Richard G. Rosenblatt
Michelle S. Silverman
James P. Walsh, Jr.