Sweeping Changes to NJ WARN Act to Take Effect April 10, 2023

As reported in our December client alert, the New Jersey Senate and New Jersey Assembly passed bills under which sweeping amendments to New Jersey's Worker Adjustment and Retraining Act (NJ WARN) would go into effect on the 90th day following the termination of Governor Murphy's March 9, 2020, Executive Order 103 regarding the COVID pandemic. Governor Murphy has now signed those bills, making April 10, 2023, the effective date for the amended NJ WARN.

As we previously discussed in the December alert and prior client alerts, these amendments include:

• NJ WARN will cover all employers with 100 or more employees (including employees outside the state), regardless of how many are "full-time" or "part-time" (as long as the employer has operated in New Jersey for more than three years).
• Employers will have to provide notice of a workplace shut down or mass layoff at least 90 days in advance of the event (up from the previous 60 days).
• Employers will be required to provide all eligible employees severance pay equal to one week of pay for each full year of employment, making New Jersey the first state to require severance pay in addition to notice. If the employer fails to provide the full 90 days' notice, it will have to pay employees an additional four weeks of severance.
• The amended law lowers the threshold for a NJ WARN event so that the 90-day notice and severance pay will be required when (i) an employer terminates or transfers its operations in an "establishment" during any continuous 30-day period (or during a 90-day aggregation period) that results in the termination of 50 or more employees (either full- or part-time); or (ii) the employer conducts a "mass layoff" — defined as a reduction in force (not the result of a transfer or termination of operations) that results in the termination of 50 or more employees (either full- or part-time), at any group of locations within New Jersey, including employees who "report to" any location in New Jersey (removing the requirement that the terminated employees comprise at least 33% of workforce).
• The amendments change the definition of "establishment," which now includes either a single site of employment in New Jersey or a group of locations within New Jersey, which do not need to be contiguous (e.g., terminations are not counted separately at different sites of employment).
• Employees may not waive their right to severance without approval by the Commissioner of Labor or a court of competent jurisdiction.

Next Steps

Because these amendments are now set to go into effect in less than 90 days, covered employers who are currently planning layoffs must ensure that they understand the changes so that they can determine whether they will be required to provide the required 90-day notice and severance pay to employees included in those job reductions. Employers should obtain legal advice to ensure compliance, particularly in light of another change under which any supervisor, manager, executive, officer, director, or owner who is directly or indirectly involved in making decisions about the layoffs may be liable for failure to comply with the revised NJ WARN Act.