New Jersey WARN Act
The federal Worker Adjustment and Retraining Notification Act (WARN Act) is a U.S. labor law that requires employers to give a 60-day notice in certain situations of employee layoffs and plant closings. The Act provide employees and their communities with advance notice of the upcoming financial impact. In additional to the federal law, several states have implemented stricter regulations, referred to as mini-WARNs. New Jersey is among these states.
Employers who fail to comply with the New Jersey WARN Act may face penalties as high as an additional four weeks of severance pay.
What is the NJ WARN Act?
The NJ WARN Act, also known as the Millville Dallas Airmotive Plant Job Loss Notification Act, is a state law that requires employers to provide employees and the state government with 90 days’ advance notice in the event of a mass layoff, termination, or plant closure. Originally passed in 2007, the law gave impacted workers enough time to find new employment or undergo retraining before becoming unemployed. In 2023, New Jersey Governor Phil Murphy signed an amended NJ WARN Act, which provided employees with even greater protections.
These changes went into effect on April 10, 2023. Most notably, the amended NJ WARN Act includes mandated severance pay.
Who must comply with the NJ WARN Act?
The NJ WARN Act applies to an individual or private employer who:
has 100 or more full-time employees, and
has been in operation for a period longer than three years.
When does the NJ WARN Act apply?
The NJ WARN Act applies when a qualified employer experiences any of the following events:
Mass Layoff: A mass layoff is a reduction in force that:
is not the result of a transfer or termination of operations, and
results in 50 or more employees at an establishment being terminated during any 30-day period.
Termination of Operations: This is the permanent or temporary shutdown of a single establishment—or of one or more facilities or operating units within a single establishment. However, “termination of operations” does not include a termination of operations necessitated by a fire, flood, natural disaster, national emergency, act of war, civil disorder or industrial sabotage, 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.).
Transfer of Operations: This is a permanent or temporary transfer of a single establishment—or one or more facilities or operating units within a single establishment—to another location, inside or outside of New Jersey.
What is “termination of employment” under the NJ WARN Act?
A termination of employment occurs when an employee is laid off without a commitment to reinstate the employee to their previous employment within six months of the layoff. Terminations of employment do not include the following:
voluntary departures or retirements,
discharges or suspensions for employee misconduct,
layoffs of seasonal employees, or
situations where employers offer employees a similar position (with similar terms and conditions) in New Jersey that’s not more than 50 miles from the previous place of employment.
In situations of layoffs of more than six months—that were initially announced to be the result of business circumstances not reasonably foreseeable—employers must give notice as soon as it becomes reasonably foreseeable that an extension beyond six months will be necessary.
Does the NJ WARN Act mandate severance payments?
Yes. To comply with the NJ WARN Act, employers must pay terminated employees at least one week of severance pay per full year of employment. If an employer fails to provide the requisite 90-day advance notice of termination in qualifying situations, the employer must also provide an additional four weeks of severance pay.
When calculating severance pay, the employer must pay employees whichever of these two rates is higher:
the employee’s average rate of compensation during the last three years of employment, or
the final regular rate of compensation paid to the employee.
Under the NJ WARN Act, severance pay should be considered compensation for back pay and losses related to the termination of the employment relationship. If employees are eligible for severance pay under a collective bargaining agreement (or for any other reason), the employer must pay the greatest amount.
Note that any back pay the employer provides under the federal WARN Act should be credited toward fulfilling the severance pay requirements of the Millville Dallas Airmotive Job Loss Notification Act.
Who must employers notify to comply with the NJ WARN Act?
To ensure compliance with the NJ WARN Act, employers must follow these notification requirements:
Use a hard-copy form to notify the:
chief elected official of the municipality where the establishment is located,
each employee who is being terminated, and
any of the employees’ collective bargaining units.
Use an online form to notify the New Jersey Commissioner of Labor and Workforce Development.
How far in advance do NJ WARN Act notifications need to be sent?
Employers must notify employees at least 90 days in advance of the first termination related to the termination/transfer of operations or mass layoff.
What resources are provided by the New Jersey Department of Labor and Workforce Development?
The New Jersey Department of Labor and Workforce Development has a Rapid Response team that assists employers and employees affected by a closing or permanent mass layoff. Rapid Response is available to provide on-site assistance at no cost to the employer. Employers who anticipate events that qualify under the NJ WARN Act can contact the Rapid Response team at 1-800-343-3919.
How does Onwards HR help employers comply?
All New Jersey employers must understand and comply with the NJ WARN Act to ensure all affected employees receive timely and accurate notice of mass layoffs or terminations. Workforce reductions are challenging and time-consuming, and the NJ WARN Act adds another layer of complexity for employers.
This is where Onwards HR can help. Onwards HR is an offboarding platform that helps businesses comply with employment laws and regulations. We can help employers develop and implement a comprehensive NJ WARN Act compliance plan. Onwards HR’s sophisticated technology can:
Determine if 50 or more employees are expected to be terminated within a 30-day period.
Dynamically create and send NJ WARN Act notices to affected employees.
Automate severance pay as required under the NJ WARN Act.
Failure to comply with the NJ WARN Act can result in significant financial penalties, including damage to the employer's reputation. Onwards HR’s technology helps employers navigate the NJ WARN Act requirements by ensuring that all affected employees receive the proper notice and severance pay during mass layoffs or terminations.
Source: NJ WARN Notification Form