Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
Updated June 5, 2020
New Jersey employers contemplating reductions in force can breathe a little easier, at least for a time.
On April 14, 2020, Governor Phil Murphy signed into law S-2353, a bill that makes two critical changes to the provisions of the Millville Dallas Airmotive Plant Job Loss Notification Act (“NJ WARN”) in light of challenges employers face from the COVID-19 pandemic.
Effective Date Delayed for Already Pending Radical NJ WARN Amendments
The new law delays, to some extent, the effective date of the radical amendments to NJ WARN that were enacted on January 21, 2020 and previously scheduled to take effect on July 19, 2020. The new effective date for these amendments is 90 days after the termination of Governor Murphy's March 9, 2020 Executive Order declaring a state of emergency in relation to COVID-19 (Executive Order 103). Executive Order 103 was set to expire on June 4, 2020, but was just renewed for another 30 days, thereby giving the January 2020 NJ WARN amendments a tentative effective date of Friday, October 2, 2020. This effective date will be further delayed if Governor Murphy further extends Executive Order 103.
For reference, the January 2020 amendments, among other things, will alter NJ WARN to cover the termination of 50 employees anywhere in the state, as compared to at a single location; increase the notice period from 60 days to 90 days; mandate severance pay of one week of pay for each year of service even if proper notice is given; and add a mandatory penalty of 4 additional weeks of severance pay if an employer fails to provide 90 days’ notice.
Exception for Disasters and National Emergencies Clarified
The new law also makes clear that NJ WARN cannot be triggered by actions made necessary by a natural disaster or national emergency, and confirms that this exception applies to the COVID-19 pandemic.
Under NJ WARN previously, job actions that were made necessary because of, for example, a natural disaster or national emergency, expressly could not create a NJ-WARN-triggering “termination of operations.” This exception was not explicitly stated, however, in the definition of a NJ-WARN-triggering “mass layoff.” The new amendment now expressly includes the same exception for “mass layoffs.” As a result, it is now clear that no aspect of NJ WARN can be triggered by actions:
made necessary because of a fire, flood, natural disaster, national emergency, act of war, civil disorder or industrial sabotage, decertification from participation in the Medicare and Medicaid programs as provided under Titles XVIII and XIX of the federal Social Security Act, Pub.L. 74-271 (42 U.S.C. s.1395 et seq.) or license revocation pursuant to P.L.1971, c.136 (C.26:2H-1 et al.).
The law states this new amendment “shall take effect immediately, and shall be retroactive to March 9, 2020.” Further, because this new amendment was explicitly enacted as a response to the COVID-19 pandemic, there can now be no doubt (if any existed) that COVID-19 qualifies as a “natural disaster” or “national emergency” for purposes of NJ WARN.
In light of these new changes, employers should contact counsel to discuss the risks and consequences of this new law on any reductions in force they have previously undertaken or plan to undertake.