PUBLICATIONS

New Jersey Governor Amends State "Mini-WARN Act" to Ease Impact on Employers Affected by the COVID-19 Pandemic

Date   Apr 20, 2020

In response to the COVID-19 pandemic, on April 14, 2020, New Jersey Governor Phil Murphy signed S-2353, which amends the New Jersey Millville Dallas Airmotive Plant Job Loss Notification Act (“April Amendments”), more commonly known as New Jersey’s mini-WARN statute. New Jersey initially amended its mini-WARN statute in January 2020 (“January Amendments”), significantly expanding notice requirements and liability when a triggering event occurs. Once the January Amendments take effect, New Jersey will be the first state in the nation to require employers who conduct a covered “mass layoff” or “termination of operations” to pay affected employees severance equivalent to one week’s pay for each full year of employment, even when the employer gives sufficient statutory notice to its workers. In addition, among other things, the January Amendments: (i) increase the required advanced notice period from 60 days to 90 days, (ii) reduce the “mass layoff” minimum threshold to 50 employees at or reporting to an establishment, (iii) redefine “establishment” to include all of an employer’s facilities within New Jersey; and (iv) extend severance liability to corporate affiliates and executives making lay-off decisions.

In the pre-coronavirus world, the January Amendments were set to go into effect on July 19, 2020. It became clear, however, COVID-19 required the Legislature to take measures to prevent the January Amendments from having unforeseen consequences on New Jersey businesses already ravaged by the impact of the virus. The April Amendments seek to accomplish this goal by creating an exception for “mass layoffs” resulting from the pandemic, and ensuring employers will not be saddled with the increased financial burdens of the January Amendments until after the COVID-19 emergency passes.

First, the April Amendments move the effective date of the January Amendments to 90 days after termination of Executive Order 103 (“EO 103”). Governor Murphy’s EO 103 declared a state of emergency and a public health emergency in New Jersey as a result of COVID-19. On April 9, 2020, the Governor extended the public health emergency by 30 days, until at least May 9, 2020. The state of emergency remains in place indefinitely. Based on the 90-day extension, the absolute earliest the April Amendments will take effect is the beginning of August 2020. Governor Murphy, however, also announced recently that a more realistic timeline for “reopening” the State will be in June or July, with July the more likely target due to recent data. If that is the case, and assuming EO 103 remains in effect until that time, the effective date of the new amendments could be pushed into sometime in September or October 2020.

Second, the April Amendments change the definition of “mass layoff” to account for and exclude “national emergencies” like the coronavirus. Specifically, the April Amendments exclude layoffs necessitated 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” or “license revocation.” The “national emergency” exception previously was applicable to a “termination of operations,” but not a “mass layoff.” This amendment is retroactive to March 9, 2020 and, therefore, will assist companies who were forced to conduct a mass layoff – but not shutdown their entire operations – due to the effects of the COVID-19 pandemic.

Despite these employer-friendly amendments, there still remains a good deal of uncertainty surrounding the January Amendments and their implementation. For example, it is unclear how the expanded advanced notice requirement (90 days) and the 30- and 90-day periods used to count employment losses are supposed to work together in light of the indefinite effective date of the January Amendments. When the original NJ mini-WARN was passed in 2007, it took effect immediately, so there was no confusion regarding employers’ advanced notice obligations in light of these aggregation periods. Since the April Amendments fail to cure these uncertainties and others, employers planning a 2020 closure, termination, or layoff should consult counsel to determine their obligations and ensure compliance.

If you have any questions about the issues discussed in this Alert, please contact the authors, Keya Denner, kdenner@fordharrison.com, Matthew Gallomgallo@fordharrison.com, and Priya Amin, pamin@fordharrison.com, all of whom are attorneys in our Berkeley Heights, New Jersey office. Of course, you can also contact the FordHarrison attorney with whom you usually work.

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