At A Glance
- Effective April 10, 2023
- The law requires employers to provide 90 days advanced notice and implements severance pay obligations under the Millville Dallas Airmotive Plant Job Loss Notification Act (WARN Act) and amends previous notice thresholds and exemptions.
WARN Act Amendments
In 2020, New Jersey Governor Philip D. Murphy signed Senate Bill 3170 into law, but the implementation was delayed by The Governor's Declaration of a State of Emergency, Executive Order (EO) 103. With the EO still in effect, New Jersey lawmakers decided to introduce Senate Bill 3162 and Assembly Bill 4768 to change the effective date, which was then signed by the governor on January 10, 2023.
The effective date for the bill is 90 days from signing, April 10, 2023.
Under the legislation, employers are required to:
- Provide 90 days' advance notice of a workplace shut down or mass layoff. This was previously 60 days.
- Provide all covered employees with severance pay equal to one week of pay for each full year of employment. This calculation is made using either the employee’s average rate of regular pay over the previous three years, or the employee’s final rate of regular pay, whichever is greater.
- The amended statute defines severance as “compensation due to an employee for back pay and losses associated with the termination of the employment relationship, and earned in full upon the termination of the employment relationship.” This may result in severance being treated as wages, but this has yet to be addressed by the NJ legislature or judicial system.
- Failure to provide 90 days' notice will result in an additional 4 weeks of severance pay.
- If employees are entitled to severance pay under a separate agreement/plan or under a collective bargaining agreement, employers may offset the amounts, but employees are still entitled to the greater amount.
The act does not distinguish between full-time and part-time employees, and both are considered covered employees.
More employers are covered by the WARN Act amendments. Employers with 100 or more employees nationwide if the employer has operated in NJ for more than three years must comply. Previously, only employers with 100 or more full time employees in NJ were covered.
Additionally, notice is required before a mass layoff. A mass layoff is a termination of 50 employees at an establishment regardless of their status as full-time or part-time or if they work at multiple work sites within the state, including any employees who report to any location in NJ. An establishment includes either a single site of employment in NJ or a group of locations within NJ.
The law no longer permits an employer to base their WARN act notice responsibilities on if 33% of the on-site workforce is terminated and eliminates the separate mass layoff test when terminating more than 500 employees.
Additionally, the amendments prohibit the use of WARN waivers via a private agreement unless approved by the commissioner or a court of competent jurisdiction.
At the time of publishing, the NJ Department of Labor and Workforce Development has not yet updated their website. Employers should continue to monitor this website for additional agency guidance updates. Employers should consult with their legal counsel to discuss if they are required to comply under the amended regulations and any additional requirements they may have.
Thank you for choosing Paylocity as your Payroll Tax and HCM partner. This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.