On April 10, 2023, New Jersey lawmakers enacted a new bill that imposes several additional requirements on employers in New Jersey under the New Jersey WARN Act. The new amendments arguably make this the most aggressive Act of its kind in the country. Employers with establishments in New Jersey must familiarize themselves with the law and amendments. Specifically:
- The law applies to all employers with 100 or more employees (nationwide) that have employees in New Jersey.
- The threshold for compliance is reduced from 33% of the workforce to just 50 impacted employees.
- Part-time employees will now be included in the threshold calculation.
- Remote employees may be included in the threshold calculation.
- The definition of “establishment” is expanded.
- Employers must pay mandatory severance to any affected employee in New Jersey.
- There are additional notice requirements.
To begin, the amendments significantly modify the threshold calculations for compliance. Prior to April 10, 2023, the NJ WARN Act defined a mass layoff as a discharge of at least 500 employees at a specific work establishment or 50 employees representing at least 33% of the total workforce of the establishment.
Following implementation of the amendments, the New Jersey WARN Act now applies to employers with 100 or more total employees nationwide with establishments in New Jersey.
The Act will now be triggered if a layoff affects at least 50 employees at or reporting to any establishment in New Jersey. This modification impacts several aspects of the Act. First it changes the threshold to 50 employees. In this way, the modification eliminates the 33% standard.
In addition, the new regulation amends the definition of “establishment.” The Federal WARN Act and the prior New Jersey WARN Act define establishment as “a single location or a group of contiguous locations, including groups of facilities which form an office or industrial park or separate facilities just across the street from each other.”
The amendments redefine and broaden the definition of establishment to a “place of employment which has been operated by an employer for a period longer than three years.” To be clear, the amendments replace “single place of employment” with “any facilities located in this State.” Accordingly, employers with establishments in New Jersey will have to consider all sites throughout the state for analysis and compliance with the new regulations. This definition will exclude temporary construction sites.
Although not specifically addressed by the amendments, “remote employees” may be implicated by the 50-or-more working “at” or “reporting to” standard. We anticipate some legal challenge and address of these terms. It appears, however, that employers with establishments in New Jersey will need to consider any remote or field employees reporting in New Jersey notwithstanding their state of domicile.
Part-time employees will now be counted under the newly adopted regulations. Under the previous New Jersey statute, part-time employees were not included in the threshold count. The amendments, however, require employers with establishments in New Jersey to include part-time employees for purposes of calculation of the “100 or more total employee” threshold as well as the “50-employees impacted” threshold. This modification significantly expands the potential application of the amended Act for employers with establishments in New Jersey.
The notice requirements changed as well. Under the previous statute, employers had to provide a 60-day notice for an anticipated layoff, termination, or operational transfer. The amendments now require a 90-day notice period.
Arguably, the most significant amendment is the requirement of mandatory severance pay. Under the prior New Jersey WARN Act, employers had to pay severance if/when they failed to provide the requisite 60-day notice. The new regulations require employers with establishments in New Jersey to pay severance - one week of pay for every one year of service - to all affected employees even when proper notice is provided. If the employer fails to provide the requisite 90-day notice, the employer must pay an additional four weeks of wages.
The amendments pertaining to the mandatory severance also provide that “employer” shall mean “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.” As such, failure to comply with the notice and severance provisions of the newly amended New Jersey WARN Act may create personal liability for “any person or group of persons acting directly or indirectly in the interest of an employer.” Again, we anticipate scrutiny by the courts as to the application of these provisions. However, as written, these amendments demand heightened review by New Jersey employers and their counsel before a mass lay-off or termination is completed.
These amendments represent some of the most onerous requirements for downsizing anywhere in the country. Employers with establishments in New Jersey must carefully contemplate the notice and compliance requirements, as well as the cost of separation, termination, or operational transfer of 50 or more employees under the newly amended Act.
If you have questions, please do not hesitate to contact James F. Devine, Chair of our Employment Law Practice Group at firstname.lastname@example.org or 1-888-488-2638.
The information in this article is provided for general informational purposes only and may not reflect the current law in your jurisdiction. By reading this article, you understand that there is no attorney-client relationship between you and Cipriani & Werner, P.C., or any of our attorneys. No information contained in this article should be construed as legal advice from Cipriani & Werner, P.C. or the individual authors.