Since the onslaught of layoffs and furloughs caused by the COVID-19 crisis, many employers found themselves caught in the crosshairs of the onerous severance and notice obligations imposed by the January 2020 Amendments to New Jersey’s Millville Dallas Airmotive Plant Job Loss Notification Act (“NJ WARN Act”), slated to go into effect on July 19, 2020.

To alleviate the consequences for businesses already struggling with the effects of the pandemic, on April 14, 2020 Governor Murphy signed into law a bill that delays the effective date of the NJ WARN Act amendments until 90 days after the lifting of the COVID-19 state of emergency, currently expected to expire on May 8, 2020. Unless the Governor extends the state of emergency to a later date, the NJ WARN Act amendments will not go into effect until August 6, 2020. The new law is effective immediately and is retroactive to March 9, 2020.

Previously, the NJ WARN Act was amended to significantly expand employee rights in the event of a plant closure or mass layoff. Among other things, the amendments:

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  • Expand coverage to many small employers by including part time and temporary workers along with full time workers when tallying the 100-employee threshold for coverage;
  • Increase the notice period employers must provide employees in the event of a covered closure or mass layoff from 60 to 90 days;
  • Expand covered “closures” or “mass layoffs” to include any termination or layoff of 50 or more employees located anywhere within the state, dispensing with the single facility concept in the prior law; and
  • Mandate severance payments of one week for each full year of employment, and a penalty of 4 additional weeks of payments if the employer fails to provide the 90-day notice.

The new law also clarifies the NJ WARN Act’s application during the COVID-19 crisis. The prior law provided that the act was not triggered by a termination of operations caused by a natural disaster or national emergency. The new law makes it clear that the COVID-19 pandemic qualifies for this exception. In addition, under the prior law this disaster and emergency exception was limited to a “termination of operations” and did not expressly extend to a “mass layoff.” The new law amends the NJ WARN Act to extend the exception to include mass layoffs.

These amendments will enable employers to make more informed decisions about closures or layoffs during the current state of emergency. Delaying the effective date of the NJ WARN Act amendments until after the end of the crisis will give employers one less thing to worry about, at least for the time being.

Employers contemplating closures or layoffs should consult with employment counsel to discuss the implications of this new law.

About the Author

Kathleen M. Connelly is a shareholder with Lindabury, McCormick, Estabrook & Cooper, P.C., based in Westfield, NJ (www.lindabury.com). With more than 25 years of experience, she concentrates her practice in employment law, representing employers and individual members of management in both the private and public sectors.