New Jersey WARN Act Beefs Up Severance Protections For Employees
As part of an avalanche of employment-related legislation passed by New Jersey in early 2020, the Garden State has added protections for those found in the undesirable position of being involved in a mass layoff.
If any business establishment that has been operating for at least 3 years and which employs at least 100 employees experiences a layoff or other termination of at least 50 full-time employees within 30 days, that business must send a notification of intent to terminate/lay off to the Commissioner of Labor and Workforce Development, affected employees, and any collective bargaining units at least 90 days before any action is taken.
Employers are also required to provide severance pay to each affected employee in the form of one week’s pay per full year worked with the Company (average weekly rate during last 3 years of employment). If the employer provides less than the 90 days required notice to an affected employee, that employee is also entitled to four more weeks of pay.
“Employer” includes any joint employers, owners of the nominal corporation, owners of a subsidiary that owns nominal corporation, or any entity makes the decision responsible for the mass termination/layoff.
Any waiver of this severance pay must be approved by the court or the commissioner.
WARN Act and Successor Companies
Any business that employs at least 50 employees is subject to the new successor company regulations of the WARN Act. A successor employer shall retain all employees hired by the predecessor employer for at least the duration of the transition period (defined as 180 days following the effective date of a change in control). These employees also become protected from termination except for cause.
Employers must, within 15 days of change of control, post a notice to employees describing the change of control, giving contact information for both the predecessor and successor employee, and highlighting the effective date of the change of control.
If a successor employer wants to remove employees during the transition period, the successor employer must demonstrate to the commissioner (by preponderance of the evidence) that removal of these employees is necessary for the business to survive.
Not all employees are protected by this regulation:
- Managerial, supervisory, or confidential employees
- Temporary employees
- A part time employee who has worked an average of less than 20 hours per week during the previous 90 days before the change in control
- An employee who has not worked at least 90 days before the change in control
This act is set to take effect 180 days after its passage, on July 19, 2020.