On April 10, 2023, the New Jersey’s Millville Dallas Airmotive Plant Job Loss Notification Amendments (NJ’s Mini-WARN Act), finally will go into effect. The amendments, initially set to go into effect nearly three years ago, were delayed due to the pandemic and still face legal challenges. Nonetheless, if they do go into effect, they materially add to employers’ obligations in the event of a covered layoff.
By way of background, the Worker Adjustment and Retraining Notification (WARN) Act is a federal law requiring employers with 100 or more employees to provide at least 60 days’ notice to employees, their representatives, and the state, in the event of a covered plant closing or mass layoff. NJ Mini-WARN is New Jersey’s version of the federal law and applies more broadly and imposes greater liability.
The amendments include significant changes to the employers’ obligations, namely employers now will have to:
(1) provide employees with 90 days’ notice, not 60 days, and
(2) will have to provide covered employees with severance pay equal to one week of pay for each full year of employment.
For a long-tenured employee, the severance can be substantial. Prior to these amendments, employers could be liable to pay severance IF they did not give sufficient notice to employees as required under the law. However, these amendments mandate severance even when an employer provides the required notice. These amendments make NJ Mini-WARN one of the most employee-friendly laws of its kind in the country.
In addition to mandatory severance and an expanded notice period, the amendments to NJ’s Mini-WARN also, among other things:
- Lower the threshold for covered layoffs. Previously, NJ’s Mini-WARN only applied to employers with 100 or more full-time employees. The new amendments lower this threshold to 50 or more full-time employees. Now, employers with 50 or more full-time employees will be required to provide notice to employees in the event of a plant closing or mass layoff.
- Expand the types of layoffs subject to the law. The amendments use a broader definition of “mass layoff” so that it applies in the event of a layoff of at least 25 full-time employees. Formerly, the law only applied if the termination amounted to at least 500 full-time employees or at least 50 full-time employees if they constitute at least 33% of the employer’s full-time workforce.
- Increase the penalties for non-compliance from up to $500/day per employee to up to $1,000/day per employee.
- Require employers provide notice to a number of different state agencies.
These burdens are onerous on businesses, but are meant to prevent greater harm. The WARN Act and the NJ Mini-WARN Act allow the government to help mitigate the wide-ranging impacts of layoffs. For instance, plant or site closings and mass layoffs can result in cascading effects on residential and commercial real estate values; and can harm local small businesses that depend on the workers’ patronage, such as dry cleaners and restaurants; and vendors. With notice, the government can try to recruit substitute employers by enticing them with a ready-trained and available workforce, re-train workers where appropriate, and take other measures to minimize fallout.
Although the WARN Act and the NJ Mini-WARN Act do not apply to all layoffs and there are significant exceptions, the liability imposed by these amendments make it all the more important for employers to consider and weigh their liability under these laws whenever they close a site or have a significant layoff. The labor and employment lawyers at Flaster Greenberg can help employers assess these risks and guide them through compliance.
Please contact Adam E. Gersh, Labor & Employment Shareholder at Flaster Greenberg, or any member of our firm’s Labor & Employment Group to learn how this law applies to you and your business.