How Federal and State Laws Regulating Mass Layoffs Could Affect New Jersey Workers

Both federal and New Jersey employment laws set restrictions on how and when employers may fire their employees, such as restrictions on discriminatory or retaliatory firings. Prior to a mass layoff of workers, many employers must provide advance notice. Their employees may be able to file suit if they fail to follow the law’s requirements. The COVID-19 pandemic brought an unprecedented number of layoffs and furloughs. We are nearing the six-month mark since the pandemic first hit this country. Courts have never ruled on a case that presents the particular circumstances we see right now. The New Jersey Legislature amended its law in early 2020 to provide additional remedies for workers, but then amended it again during the pandemic to exempt many layoffs from coverage by the law.

The Federal WARN Act

The Worker Adjustment and Retraining Notification (WARN) Act of 1988 requires employers with one hundred or more employees to notify employees before large layoffs or plant closures.

Notice Requirements

An employer must provide written notice to each “affected employee” or their representative, such as a labor union, at least sixty days before an event that will result in significant “employment loss.” The statute defines “employment loss” to include:
– Termination of employment that is neither voluntary nor for cause;
– A reduction in hours of over fifty percent for six months; or
– A layoff that continues for more than six months.
In the current situation, the WARN Act could apply to employers who furloughed fifty or more employees for more than six months, or who substantially reduced their hours.

Exceptions to Notice Requirements

The WARN Act allows a reduced notification period when the employer terminates or furloughs employees because of “business circumstances that were not reasonably foreseeable” within the required timeframe, or “any form of natural disaster.” The current pandemic could possibly fall under either category, although this would only allow employers to provide less than sixty days’ notice. It would not exempt them from the requirement altogether.

The pandemic’s economic impact and the measures intended to fight its spread might not have been foreseeable for most employers sixty days in advance. A pandemic could constitute a natural disaster, although the statute specifically cites “a flood, earthquake, or the drought currently ravaging the farmlands of the United States” as examples.

Employees’ Remedies

An employer who does not provide the required notice under the WARN Act may be liable for back pay and other benefits. Back pay is based on the greater of the employee’s most recent rate of pay, or the average rate they received during the previous three years. Damages are capped at sixty days of back pay.

New Jersey Law

In New Jersey, the Millville Dallas Airmotive Plant Job Loss Notification Act, commonly known as the Mini WARN Act, is similar to its federal counterpart. A bill signed into law in January 2020 would require covered employers to provide severance pay along with notice of an upcoming plant closure or mass layoff. That bill was supposed to take effect in July, but it is currently postponed under the Governor’s declaration of a public health emergency, first issued on March 9 and most recently renewed on August 27.

The New Jersey Legislature passed a bill in April that exempts layoffs “made necessary because of a…national emergency” from the notice requirement. This appears to apply to COVID-related layoffs.

The Resnick Law Group’s employment attorneys can help you if you were affected by a layoff or have a dispute with your employer in New Jersey or New York. Please contact us online, at 973-781-1204, or at 646-867-7997 today to schedule a confidential consultation.

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