On December 20, 2007, Governor John Corzine signed a new law imposing stringent requirements on certain employers shutting down or downsizing New Jersey worksites. This Act requires employers with 100 or more employees to provide 60 days notice prior to any “mass layoff,” “transfer of operations,” or “termination of operations.” The Act went into effect with the Governor’s signature.
By enacting this legislation New Jersey joins with several other states that have adopted state laws that are modeled after the federal Worker Adjustment Retraining Notification Act (“WARN”), 29 U.S.C. § 2101 et seq. Like New Jersey’s new law, the federal WARN act requires employers to give 60 days notice prior to any “plant closing” or “mass layoff.”
There are, however, important differences between New Jersey’s new legislation and the federal WARN Act. First, unlike the federal WARN Act, New Jersey’s new law does not have exemptions for faltering or bankrupt businesses. Second, New Jersey’s new law severely penalizes employers who fail to comply with the notice provisions. An employer who fails to provide an employee with 60 days notice is required to pay the employee a week’s worth of wages for each year the employee worked for the employer. This payment is in addition to any other severance pay that the employer is obligated to provide the employee.
Employers who plan a reduction in force or a termination of operations should be mindful of this new legislation and note its differences from the federal WARN act.