Work for a big company in NJ? You have new rights in the event of layoffs
🚩 New rules kicked in on April 10
🚩 More workers are eligible for perks in the event of mass layoffs/plant shutdowns
🚩 Severance pay is now required
A mass-layoff law that was originally scheduled to take effect during the initial months of the coronavirus pandemic is now officially on the books in the Garden State.
Under it, many workers in New Jersey are delivered a handful of additional rights when a layoff decision or shutdown results in the loss of 50 or more employees.
"Larger employers in the state should absolutely be aware of this, as should employees who work for larger employers," said Adam Kleinfeldt, a workers' rights attorney with Deutsch Atkins & Kleinfeldt in Hackensack.
The new law, which took effect on April 10, amends the rights afforded under the Worker Adjustment and Retraining Notification (WARN) Act.
Implementation was pushed back during the COVID-19 emergency with an executive order from Gov. Phil Murphy. The governor signed an updated bill in January 2023 that allowed the requirements of the bill to kick in this month.
Below is a rundown of the biggest changes that employers and workers should know.
Mandatory severance pay
With the new law, New Jersey is said to be the most generous to workers in terms of severance related to widespread layoffs.
Up until the recent change, workers who lost their job in a mass-layoff scenario, or a business transfer or closing, were entitled to severance pay only if the employer failed to provide proper notice of the major change.
Now, workers in these situations must receive a certain amount of severance pay, whether or not proper notice is given.
Under the law, severance is equal to one week of pay for every one year of employment. A worker can receive an additional four weeks of severance pay if their employer fails to provide proper notice.
Notice of layoff/shutdown
The new law extends the amount of advance warning that workers should receive.
The notification window is now 90 days (up from 60) ahead of discharge of the first employee as the result of a mass layoff, termination of operations, or transfer of operations.
An employer must also notify the municipality where it's located, and New Jersey officials.
The 90-day rule doesn't apply if a company needs to cut many workers due to a disaster such as a flood or fire.
The new rules affect entities with 100 employees or more nationwide. This could include a company with one location, or one with several locations.
"If an employer has, let's say, five different locations and they terminate 10 employees from each site, they'd hit the 50-employee threshold," Kleinfeldt said.
And the new rule gets rid of a lot of language that had been used to determine when a layoff is actually considered a "mass layoff." Today, the rule is simple: the WARN Act requirements kick in when at least 50 workers are laid off.
In addition, WARN Act perks are no longer exclusively for full-time workers. The amendment expands the rule to include part-timers.