According to the U.S. Department of Labor, the Worker Adjustment and Retraining Notification Act requires employers who employ 100 or more workers to provide a 60-day written notice of impending mass layoffs and plant closings. Per WARN, this requirement goes into effect when the layoff or closing will affect at least 50 individuals who work at a single site of employment. The act’s objective is to provide workers time to adjust to the idea of employment loss, to seek and obtain other employment and, if necessary, seek additional training or retraining for future employment. WARN does not cover severance pay, but New Jersey’s recent amendment changes that.
According to The National Law Review, Governor Phil Murphy signed Senate Bill 3170 into law on January 21, 2020. The bill will make New Jersey the first state in the nation to require companies to pay severance pay to workers in the event of a mass layoff.
Prior to this amendment, employers in the state only had to pay severance pay when they failed to provide workers with a 60-day advance notice. Per the amendment, however, employers must now provide all qualified workers with one week of pay for every year of employment with the company. Furthermore, if the employer fails to provide the requisite notice, severance pay obligations increase to four weeks for every year of employment.
The amendment also brings about other drastic changes. One notable change is the reduction of trigger requirements. WARN requires a notice only if the plant closing or layoff will affect 50 or more employees who worked with the company for a certain number of years and who worked so many hours a week. The act may also be triggered with 33% of the workforce is laid off. The amendment eliminates these trigger requirements altogether.
The amendment also expands the notification period. Per S.B. 3170, employers must provide a 90-day advance written notice rather than a 60-day notice.
Furthermore, S.B. 3170 expands coverage to all impacted locations throughout the state. Formerly, WARN only went into effect when layoffs occurred at a single location.