UPDATE – on January 21, 2020, Governor Phil Murphy signed the bill into law.  It will take effect in 180 days (i.e., on July 19, 2020).

The New Jersey Senate has passed a bill (S.3170) that would amend the New Jersey Millville Dallas Airmotive Plant Loss Job Notification Act, more commonly referred to as the “NJ WARN Act,” to require severance payments and increase notification requirements for employees impacted by certain mass layoffs, transfers or terminations of operations.

Currently under the NJ WARN Act, employers with 100 or more full-time employees must provide 60 days’ notice to affected full-time employees in the event of a mass layoff or transfer or termination of operations. A mass layoff is defined as a reduction in force, during a 30-day period, that results in the termination of 500 or more full-time employees or the termination of 50 or more full-time employees representing at least one-third of an employer’s total workforce. Under the current law, employers are only required to make severance payments to affected employees if they fail to provide such employees with the required amount of notice of termination or layoff.

The pending bill, if enacted, would:

  • revise the definition of a “mass layoff” to mean a reduction in force, during a 30-day period, that results in the termination of 50 or more employees, regardless of full-time or part-time classification, at or reporting to an “establishment” (as defined in the bill);
  • require employers with 100 or more employees (regardless of full-time or part-time status) to provide at least 90 days’ notice to impacted employees before a mass layoff, transfer of operations to another location, or shutdown of an establishment;
  • require employers to pay severance of one week’s wages for every year of an impacted employee’s service in the event of a mass layoff or shutdown/transfer resulting in the termination of 50 or more employees in an establishment during any 30-day period, regardless of whether or not appropriate notice is provided to affected employees;
  • require employers who fail to satisfy the 90-day notice requirement to pay an additional four weeks of severance to affected employees; and
  • expand the definition of “establishment” to include either a single location or a group of all of an employer’s locations in New Jersey (currently, the NJ WARN Act defines an establishment as a single location or a group of contiguous locations which form an office or industrial park, or separate buildings across the street from each other).

Covered employees subject to a collective bargaining agreement or other severance plan or policy would be eligible for the statutory severance described above or any severance pay provided pursuant to the CBA or severance plan/policy, whichever is greater. Employees would not be permitted to waive the statutory right to severance except with the approval of a court or the Commissioner of Labor and Workforce Development.

In another notable change, the bill would broadly define an employer to include “any individual, partnership, association, corporation, or any person or group of persons acting directly or indirectly in the interest of an employer in relation to an employee, and includes any person who, directly or indirectly, owns and operates the nominal employer, or owns a corporate subsidiary that, directly or indirectly, owns and operates the nominal employer or makes the decision responsible for the employment action that gives rise to a mass layoff subject to notification.” Accordingly, the law, if enacted, would impose liability on individuals acting in the interest of an employer, including individuals who own the employing entity or are responsible for the decision to effectuate the layoff.

The bill passed the state Senate with a vote of 27-13 on December 16, 2019 and a nearly identical bill (A.5145) awaits a state Assembly floor vote. We will continue to monitor and report on further developments regarding this bill.

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Photo of Arielle E. Kobetz Arielle E. Kobetz

Arielle E. Kobetz is an associate in the Labor & Employment Law Department and a member of the Employment Counseling & Training Group. Her practice focuses on providing clients with strategies and counseling related to a variety of workplace-related disputes, including employee terminations…

Arielle E. Kobetz is an associate in the Labor & Employment Law Department and a member of the Employment Counseling & Training Group. Her practice focuses on providing clients with strategies and counseling related to a variety of workplace-related disputes, including employee terminations and discipline, leave and accommodation requests, and general employee relations matters. She also counsels clients on developing, implementing and enforcing personnel policies and procedures and reviewing and revising employee handbooks under federal, state and local law.

Prior to joining Proskauer, Arielle served as a law clerk at the New York City Human Resources Administration, Employment Law Unit, where she worked on a variety of employment discrimination and internal employee disciplinary issues.

Photo of Evandro Gigante Evandro Gigante

Evandro is the go-to employment litigator and counselor when clients face their most challenging, bet the reputation claims, or want to develop policies and practices that mitigate legal risk. As an award-winning partner in the Labor & Employment Law Department, member of the…

Evandro is the go-to employment litigator and counselor when clients face their most challenging, bet the reputation claims, or want to develop policies and practices that mitigate legal risk. As an award-winning partner in the Labor & Employment Law Department, member of the Employment Litigation group, and co-head of the Counseling, Training & Pay Equity group, he represents clients on a variety of labor and employment matters, including allegations of sexual harassment, race, gender, national origin, disability and religious discrimination. In addition, Evandro handles restrictive covenant matters, including non-compete, non-solicitation and trade secret disputes. Evandro also counsels employers through the most sensitive employment issues, including matters involving employer diversity, equity and inclusion initiatives.

With a focus on discrimination and harassment claims, Evandro has extensive experience defending clients before federal and state courts. He tries cases before juries and arbitrators and routinely represents clients before administrative agencies such as the Equal Employment Opportunity Commission, as well as state and local human rights commissions. Evandro often draws on his extensive litigation experience to help clients avoid the courtroom by effectuating positive change in the workplace through impactful anti-discrimination and harassment training, as well as robust employment policies.

Working in a wide range of industries, Evandro has experience representing clients in professional services, including law firms, financial services, including private equity and hedge funds, higher education, sports, media, retail, and others. Evandro also advises charter schools and other not-for-profit organizations on labor and employment matters on a pro bono basis.

Photo of Laura Fant Laura Fant

Laura Fant is a special employment law counsel in the Labor & Employment Law Department and co-administrative leader of the Counseling, Training & Pay Equity Practice Group. Her practice is dedicated to providing clients with practical solutions to common (and uncommon) employment concerns…

Laura Fant is a special employment law counsel in the Labor & Employment Law Department and co-administrative leader of the Counseling, Training & Pay Equity Practice Group. Her practice is dedicated to providing clients with practical solutions to common (and uncommon) employment concerns, with a focus on legal compliance, risk management and mitigation strategies, and workplace culture considerations.

Laura regularly counsels clients across numerous industries on a wide variety of employment matters involving recruitment and hiring, employee leave and reasonable accommodation issues, performance management, and termination of employment . She also advises on preparing, implementing and enforcing employment and separation agreements, employee handbooks and company policies, as well as provides training on topics including discrimination and harassment in the workplace. Laura is a frequent contributor to Proskauer’s Law and the Workplace blog and The Proskauer Brief podcast.