In light of the COVID-19 pandemic, on April 14, 2020, New Jersey further amended its mini-WARN Act (NJ WARN) to avoid a harsh and unintended consequence for employers who will need to engage in layoffs.
Specifically, the most recent amendments exempt from NJ WARN’s coverage any mass layoffs resulting from a natural disaster or national emergency (such as COVID-19), and delay the effective date of the amendments that were passed on January 21, 2020, which were originally scheduled to take effect on July 19. As discussed in our prior client alert, New Jersey amended NJ WARN earlier this year in such a way that, had those amendments taken effect on July 19, as scheduled, businesses would be incentivized to engage in triggering events under the law in advance of July 19, to avoid the January 21 amendments' 90-day notice requirement and the obligation to pay each affected employee at least one week of severance for every full year of employment.
The significant changes to NJ WARN that were signed into law on January 21, 2020, and scheduled to take effect on July 19, 2020, include:
- Lowering the threshold for the scope of an employment loss covered by NJ WARN, such that (i) the termination or transfer of an establishment’s operations during any continuous 30-day period that results in the termination of 50 or more employees, or (ii) a "mass layoff" that results in the termination of 50 or more employees, including employees who “report to” any location in New Jersey, will qualify as a triggering event under the law. For the purposes of this law, "establishment" includes a single location or a group of locations within New Jersey.
- Requiring covered employers to provide notice of a termination of operations or mass layoff at least 90 days in advance of the event.
- In addition to the 90 days' notice, covered employers are required to provide each terminated employee with severance pay equal to one week of pay for each full year of employment. Failure to provide impacted employees with the full 90 days of notice will result in covered employers having to pay employees an additional four weeks of severance.
In light of the financial and operational constraints that many New Jersey businesses are facing as a result of the COVID-19 pandemic, employers had been concerned about the implications of the above amendments on those employers who will need to engage in reductions in force.
In response to those concerns, the legislature passed, and Governor Murphy signed, a bill that further amends NJ WARN to:
- Exclude from NJ WARN's coverage any mass layoffs that result from a "fire, flood, natural disaster, national emergency, act of war, civil disorder or industrial sabotage, and decertification from participation in the Medicare and Medicaid programs as provided under Titles XVIII and XIX of the federal 'Social Security Act' Pub.L. 74-271 (42 U.S.C. s.1395 et seq.) or license revocation pursuant to P.L.1971, c.136 (C.26:2H-1 et al.)," and to do so retroactive to March 9, 2020; and
- Delay the effective date of the January 21, 2020 amendments to the 90th day following the termination of Governor Murphy's March 9, 2020 Executive Order, which declared a public health emergency and state of emergency in New Jersey.
The facts, laws, and regulations regarding COVID-19 are developing rapidly. Since the date of publication, there may be new or additional information not referenced in this advisory. Please consult with your legal counsel for guidance.
DWT will continue to provide up-to-date insights and virtual events regarding COVID-19 concerns. Our most recent insights, as well as information about recorded and upcoming virtual events, are available at www.dwt.com/COVID-19.