No business wants to lay off its employees, but sometimes, conditions force companies to cut back. A bill moving through the lame-duck session, however, could require companies to make these decisions earlier than they would otherwise like to.

The Assembly Labor Committee today approved A-5145, which would require businesses to pay severance to each laid-off employee if the layoffs impact 50 or more employees, both full and part time. It would also increase the required notice from 60 days to 90 days before the layoffs take effect.

NJBIA has worked with the Senate  sponsor on amendments that will mitigate some of the additional burdens it would have impose on business, but the severance provision still remains.

The bill would amend the WARN Notice Law to increase the minimum number of days’ notice that certain employers must give to employees of a covered plant closing, transfer, or mass layoff from 60 days to 90 days, and makes the law’s requirement to provide severance pay apply whether or not the employer provides the required notice.

If they fail to provide 90 days’ notice, businesses would be penalized with an additional four weeks of severance.

Under the current WARN Notice Law, companies are only required to pay severance as a penalty for not complying with the notification requirements of the law. A-5145 would make it requirement even if notification is provided. It also requires the severance to equal to one week’s wages for every year an employee has worked for the employer.

“If enacted, this proposal would make our business climate even less competitive,” said NJBIA Vice President for Government Affairs Mike Wallace. “It would come after the enactment of a series of tax increases and other expensive mandates imposed on employers during the past year, including a higher corporate business tax, higher state income tax, new paid sick leave requirements and the signing of a $15 minimum wage.”


4 responses to “Bill Would Mandate Severance Pay for Laid-off Workers”

  1. Adam says:

    Time to pack up shop and get out of New Jersey!!

  2. Dan says:

    Tax us, regulate us, and now punish us for saying “F.U.” when we leave NJ to run our business in a state that actually respects job creators? Fellow employers, wake up…
    we are just Murphy Mules now.

  3. Would this law cover non-profits with government contracts?

  4. Tom C says:

    Legislators need to get their heads out of their ass. I work on a contractual basis for large companies in the automotive. Our contracts have a 30 day out clause from the OEM’s. My labor force has an average of 16 years at the company awesome benefits 401, profit sharing and so on. So if a contract is pulled and I let 80 people go I will owe 80 people 4 months of severance. The state of NJ never paid the grant money to move to this state! Still looking for the 600,000 promised when we moved from NY. This state is going to hell! Quickly! Hey, Murphy go smoke a joint!