New Jersey’s Mini-WARN Act Amendment Expands Its Scope, Notice Period, and Adds Automatic Severance Requirements

On January 10, 2023 New Jersey Governor Phil Murphy signed into law a new version of New Jersey’s “mini-WARN Act,” or the Worker Adjustment and Retraining Notification Act (“NJ WARN Act”). The amendment makes the NJ WARN Act in some ways the most expansive WARN Act in the country: it increases the scope of covered employers, counts employee layoffs statewide (rather than by worksite) to meet the notice threshold, requires 90 days’ notice (rather than 60), and mandates severance payments even when proper notice is given. These changes will take effect on April 10, 2023.

The NJ WARN Act is one of several state “mini-WARN Acts,” which supplement the federal WARN Act applicable to private employers with 100 or more employees. Both the federal and state WARN Acts create employee notice requirements in advance of reductions in force. Even when a planned reduction in force does not trigger federal WARN Act notice requirements, employers must also be aware of state WARN Act notice thresholds, particularly now in New Jersey.

The new version of the NJ WARN Act expands the scope of the law in a number of ways, rendering it the most burdensome in the country in several ways:

• Part-time employees now count: The thresholds for covered employers and affected employees now include part-time employees.  This means that the scope of covered employers has been expanded from those with 100 or more full-time employees to employers with 100 or more full or part-time employees.
• Employee layoff count is now statewide: The threshold for determining whether the number of employees to be laid off triggers notice requirements is now 50 or more full or part-time employees working at or reporting to any employer location statewide—eliminating a site-specific analysis.
• 90 days’ notice required: Employers planning covered reductions in force are now required to provide affected employees with 90 days’ notice instead of 60. If an employer does not comply with the full 90-day notice requirement, the employer will be required to pay four weeks of severance in addition to the new automatic severance described below.
• Automatic one week’s severance per year of employment: Even if a covered employer provides the requisite 90 days of notice to employees, it is also now required to pay affected employees severance equal to one week’s salary for every full year of employment.

This amendment to the NJ WARN Act was originally set to go into effect on July 20, 2020, but was repeatedly delayed due to the COVID-19 state of emergency in New Jersey. Employers should be careful to evaluate planned reductions in force in New Jersey and determine whether the revised NJ WARN Act is triggered, and if so, be sure to budget for the required severance and extended 90-day-notice period.