The New Jersey Legislature has unanimously voted to provide relief to New Jersey employers from certain Millville Dallas Airmotive Plant Job Loss Notification Act (“NJ WARN Act” or “the Act”) requirements in light of business hardship caused by COVID-19.
The NJ WARN Act
New Jersey Governor Phil Murphy signed amendments to the NJ WARN Act into law on January 21, 2020. The Act is intended to mandate that certain employers provide severance pay for mass layoffs. The NJ WARN Act makes New Jersey the first state in the country to require severance pay for mass layoffs. It was scheduled to go into effect on July 19, 2020.
The January 2020 amendments to the NJ WARN Act altered the Act to cover termination of fifty (50) of a company’s employees anywhere in the state. Previously, the Act only covered such termination if it occurred at a single location. The Act’s January 2020 amendments also increased the notice period from sixty (60) days to ninety (90) days. Moreover, the alterations to the NJ WARN Act also mandate severance pay of one week of pay for each year of service even if proper notice is given. If the employer fails to provide ninety (90) days notice, the NJ WARN Act’s amendments add a mandatory penalty of four additional weeks of severance pay.
The Amendments to the NJ WARN Act
On April 14, 2020, Gov. Murphy signed into law S-2353, a bill that makes two vital changes to the provisions of the NJ WARN Act in light of challenges employers face as a result of the COVID-19 pandemic.
The Amendments’ Effective Date
The original amendments to the NJ WARN Act were scheduled to go into effect on July 19, 2020. S-2353 makes it so that the amendments become effective ninety (90) days after Governor Murphy lifts Executive Order 103. Executive Order 103 was enacted on March 9, 2020, and declared a state of emergency in New Jersey due to COVID-19.
Moreover, the amended definition of the term “mass layoff,” to be discussed in the next section, is retroactive to March 9, 2020.
The Amendments Redefine The Term “Mass Layoff”
The purpose of the new amendments to the NJ WARN Act is to address “mass layoffs” due to the COVID-19 pandemic. The NJ WARN Act now specifically excludes from the definition of “mass layoff”:
“mass layoff[s] made necessary because of . . . 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’ . . . or license revocation pursuant to [the Health Care Facilities Planning Act] . . . .”
This is significant. Previously, the Act only provided an exemption from its notice and severance pay requirements for shutdowns that were, among other things, a result of a natural disaster or national emergency. As amended, the Act makes clear that NJ WARN cannot be triggered by actions made necessary by a natural disaster or national emergency. It also confirms that this exception applies to the COVID-19 pandemic.
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