The New Jersey WARN Act and the Coronavirus Epidemic—An Update

In response to the COVID-19 crisis, New Jersey Governor Phil Murphy has signed into law new amendments to the Millville Dallas Airmotive Plant Job Loss Notification Act, more commonly referred to as the New Jersey WARN Act. The new amendments apply to the current statute and to prior amendments enacted on January 21 of this year that were to take effect on July 19, 2020. A full discussion of the January 21 amendments can be found here.

Once the January 21 amendments go into effect, the Act will require employers with 100 or more employees to give advance notice to the affected employees of any reduction in force involving at least 50 employees. Employees not given the required notice currently may bring a civil action for damages; when the January 21 amendments take effect, even when an employer complies with the Act’s notice requirements, each affected employee will be entitled to severance pay in an amount equal to one week of pay for each year of service. The new amendments to the Act have important implications for the Act’s notice and severance provisions.

On March 13, 2020, President Trump utilized the National Emergency Act to declare a national emergency due to the coronavirus outbreak. Under the current WARN Act and the January 21 amendments, an employer implementing a reduction in force because of the closing of a facility due to a national emergency, such as the COVID-19 crisis, is exempt from the notice obligations imposed by the Act. The significance of the new amendments to the Act is that the national emergency exemption now will also apply to “mass layoffs” – reductions in force not involving closings of facilities. Thus, going forward, employers implementing either facility closures or mass layoffs because of the COVID-19 crisis will be exempt from the Act’s notice obligations. Note that reductions in force unrelated to the COVID-19 crisis are not covered by the national emergency exemption. Note also that the new amendments are retroactive to March 9, 2020.

In addition, the new amendments move the effective date of the January 21 amendments from July 19, 2020, to the 90th day after the termination of Governor Murphy’s Executive Order 103, which declared a Public Health Emergency and State of Emergency due to the coronavirus outbreak. Thus, the mandatory severance payments established by the January 21 amendments will not be required with regard to reductions in force implemented before the new, as yet unknown, effective date.

Finally, it must be noted that the above discussion is not intended as a detailed analysis of the New Jersey WARN Act’s requirements. The Act is a complicated statute, and New Jersey employers would do well to consult with counsel familiar with the Act before implementing a reduction in force.

If you have questions about this blog, feel free to contact an attorney in the Gibbons Employment & Labor Law Department.