New Jersey’s WARN Act (the Millville-Dallas Airmotive Plant Job Loss Notification Act) has been amended, effective July 19, 2020. N.J.S.A. § 34:21-1, et seq., to expand greatly its scope and requirements:
- Definitions: the terms below will change to expand the Act’s coverage of employers and their actions.
- Establishment- the Act no longer applies solely to a “single place of employment.” Instead, its scope will cover all of the employer’s facilities, i.e., “Establishment may be a single location or group of locations, including any facilities located in this State.”
- Full-Time and Part-Time Employees– Notices of layoff decisions – and the number of workers to be covered by the Act – now are mandatory for all workers. Similarly, the number of employees required for coverage under the Act also includes both full-time and part-time staff.
- Mass Lay Off– the new definition drastically expands the Act and provides that a mass layoff requires 50 or more employees terminated “at or reporting to the establishment” arguably expanding the definition to include out-of-state employees, remote employees, etc.
- Employer– the definition will expand to include: “any individual, partnership, association, corporation, or any person or group of persons acting directly or indirectly in the interest of an employer in relation to an employee, and includes any person who, directly or indirectly, owns and operates the nominal employer, or owns a corporate subsidiary that, directly or indirectly, owns and operates the nominal employer or makes the decision responsible for the employment action that gives rise to a mass layoff subject to notification.”
- Notice: Previously, the Act mirrored the federal WARN Act in that covered employers were required to provide 60 days’ written notice to affected employees of a mass layoff or plant closing. The amendment expands that number to 90 days’ notice. If an employer fails to provide the required notice, it must pay an extra four weeks of pay to each employee who is provided less than 90 days’ notice.
- Severance: The amended Act requires an employer to pay one week’s severance for each full year of employment, in a lump sum, on the first regularly scheduled pay day following the employee’s last day of employment. The severance rate is either the employee’s regular rate over the last three years of employment or the employee’s final regular rate, whichever is greater. If an employee is subject to a collective bargaining agreement, company policy or employment agreement that provides for greater severance, the employer must pay that amount. This requirement makes it very costly to conduct a layoff.
- Waiver and Releases: Absent approval by the Commissioner of the Department of Labor or a court of competent jurisdiction, an employer cannot obtain a waiver of any severance payments. Because affected workers are guaranteed severance under the Act, requiring the signing of a general release for this severance may no longer satisfy the requirement to offer consideration in exchange for a release of claims. Employers should consult with legal counsel as to what they may need to offer to obtain a release of claims.
These changes are significant and the impact on employers is still uncertain.