NJ Delays Expansion of WARN Act in Light of Coronavirus Crisis

April 14, 2020Alerts

On April 14, 2020, New Jersey Gov. Phil Murphy signed into law a new set of amendments to the NJ WARN Act – the state’s version of the federal Worker Adjustment and Retraining Notification Act – that modify or delay the amendments that were passed just before the coronavirus crisis hit.

The original amendments, set to go into effect on July 19, 2020, were enacted before anyone could have predicted the toll that the pandemic would take on businesses in New Jersey.

As discussed in our previous alert, those amendments expanded the scope of the NJ WARN Act (also known as the Millville Dallas Airmotive Plant Job Loss Notification Act) to cover more employers by counting part-time employees. They also require 90 days’ notice of a triggering event and mandated severance to all affected employees.

The impending expansion of the law has sparked anxiety among employers that are now making difficult workforce and staffing decisions in response to the pandemic and the economic downturn it triggered.

Now the legislature has amended the law again to resolve two glaring problems in the statute. 

Exceptions Expanded

First, the new law modifies the “exceptions” provisions. Both the original NJ WARN Act and the recent amendments contained exceptions only for a permanent or temporary “termination of operations.” Those exceptions were for those “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.”  

In the case of the coronavirus, the “national emergency” exception would apply, thereby absolving employers forced to terminate their operations from the obligation of providing NJ WARN notice. But until now that exception did not apply to a “mass layoff” made necessary by the virus. The new amendment adds those same exceptions to the definition of “mass layoff” and makes that change retroactive to March 9, 2020. 

Effective Date Indefinitely Delayed

The second major change is that the effective date of the original amendments is being delayed from July 19, 2020 until 90 days after the termination of the State of Emergency as declared by Gov. Murphy in Executive Order 103.

This change is significant because the inclusion of part-time employees had vastly expanded the number of businesses covered by the law. That meant that those employers could be making decisions right now that would have financial consequences they had not considered.

The original amendments eliminated the requirement that the 50 or more affected employees make up one-third of the workforce at the site. By declaring that any layoff of 50 or more employees across all sites is a triggering event, the original amendments further expanded NJ WARN’s applicability.

Now, with the effective date pushed back until a full fiscal quarter after the State of Emergency is over, employers can breathe a little easier because the decisions they are making now are not likely to be impacted by the amendments when they take effect.

For more information about this alert, please contact Jonathan D. Ash at 609.895.7079 or [email protected], or any member of the firm’s national Labor & Employment Department.