—Summary—
New Jersey requires employers with 100 or more employees to provide 60 days notice prior to laying off 50 or more full-time employees within a 30-day period. The law also covers layoffs due to business terminations. Employers who fail to comply with the law must pay aggrieved employees one week of wages for each full year worked. This Fast Facts explains how the law works and offers compliance strategies.
—Background—
On December 20, 2007, Governor Corzine enacted P.L.2007, c.212, sometimes called the NJ WARN Act, which requires employers with 100 or more employees to provide 60 days notice prior to any “mass layoff,” “transfer of operations” or “termination of operations.”
What Does the Law Require?
This law requires employers with 100 or more employees to provide 60 days notice prior to any “mass layoff,” “transfer of operations,” or “termination of operations.” The employer must provide notice to the Commissioner of the NJ Department of Labor and Workforce Development, chief elected official of the municipality where the business is located, the employees, and any collective bargaining unit of the employees. The law covers any transfer or termination of operations affecting 50 or more full-time positions in a 30-day period.
Definitions
Employers should be familiar with the definitions of certain terms in order to comply with this law.
“Full-time employee” means an employee who is not a part-time employee. “Part-time employee“ means an employee who is employed for an average of fewer than 20 hours per week or who has been employed for fewer than six of the 12 months preceding the date on which notice is required pursuant to this act.
“Mass layoff” means the termination of employment at an establishment during any 30-day period for: 1) 500 or more full-time employees or 2) 50 or more of the full-time employees representing one-third or more of the full-time employees at the establishment. A “mass layoff” is a reduction in force which is not the result of a transfer or termination of operations.
“Operating unit” means an organizationally distinct product, operation, or specific work function within or across facilities at a single establishment.
“Response team” means the business closing response team established pursuant to Section 5 of this act. The NJ Department of Labor and Workforce Development Rapid Response Team assists both employers and workers involved in a closing or permanent mass layoff. The Response Team provides on-site assistance during your working hours and at no cost to you. (To contact the Response Team, call 1-800-343-3919 or send an email to Rapid.Response@dol.state.nj.us).
“Termination of employment” means the layoff of an employee without a commitment to reinstate the employee to his previous employment within six months of the layoff:
- except that “termination of employment” shall not mean a voluntary departure, retirement, or a discharge or suspension for misconduct of the employee connected with the employment or any layoff of a seasonal employee or refer to any situation in which an employer offers to an employee, at a location inside the State and not more than 50 miles from the previous place of employment, the same employment or a position with equivalent status, benefits, pay and other terms and conditions of employment, and,
- except that a layoff of more than six months which, at its outset, was announced to be a layoff of six months or less, shall not be treated as a termination of employment under this act if the extension beyond six months is caused by business circumstances not reasonably foreseeable at the time of the initial layoff, and notice is given at the time it becomes reasonably foreseeable that the extension beyond six months will be required.
“Termination of operations” means the permanent or temporary shutdown of a single establishment, or of one or more facilities or operating units within a single establishment.
- “Termination of operations” shall not include a termination of operations 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.).
“Transfer of operations” means the permanent or temporary transfer of a single establishment, or one or more facilities or operating units within a single establishment, to another location, inside or outside of this state.
Penalties
The law requires employers that fail to provide notice to pay an aggrieved employee one week of wages for each full year of employment worked by the employee. The law requires this penalty to be calculated as either: the average regular rate of compensation received during the employee’s last three years of employment with the employer, or the final regular rate of compensation paid to the employee, whichever rate is higher. This penalty is in addition to any other severance provided by the employer to the employee. The bill also authorizes the employee, or a representative, to initiate a suit in Superior Court to enforce these protections.
Strategies for Compliance
Employers should be mindful of this State requirement in connection with any plans to institute a reduction-in-force or to terminate operations or employees. While the requirement to provide 60 days notice is consistent with the federal Worker Adjustment Retraining Notification Act (WARN – 29 U.S.C. s.2104 et. seq.), employers should be mindful that there are other major differences between this law and the federal WARN Act. For example, unlike the federal WARN Act, New Jersey’s law does not provide an exemption for a business that is faltering or in bankruptcy.
Additionally, employers should be mindful that the penalty for noncompliance is extremely severe. For missing only a single day’s notice, a business is required to provide a week’s worth of wages for each year the employee worked for the employer.
—For More Information—
Millville Dallas Airmotive Plant Job Loss Notification Act (P.L.2007, c.212):
http://www.njleg.state.nj.us/2006/Bills/PL07/212_.HTM
NJ Department of Labor & Workforce Development information notice: how the NJ law works and how it differs from the federal WARN Act:
http://nj.gov/labor/lwdhome/warn/njwarn.html
NJ Rapid Response Team:
http://careerconnections.nj.gov/careerconnections/resources/rapid/rapid_response.shtml
Federal WARN Act compliance assistance:
https://www.doleta.gov/layoff/warn.cfm
New York State WARN, which applies to layoffs and terminations that occur after February 1, 2009:
https://labor.ny.gov/workforcenypartners/warn/warnportal.shtm
—For more information—
If you need additional information, please contact NJBIA’s Member Action Center at 1-800-499-4419, ext. 3 or member411@njbia.org.
This information should not be construed as constituting specific legal advice. It is intended to provide general information about this subject and general compliance strategies. For specific legal advice, NJBIA strongly recommends members consult with their attorney.
