New Jersey’s Mini-WARN Act Amendments to go into effect in April 2023
Approximately three years ago – in January 2020 – New Jersey Governor Phil Murphy into law, significant amendments to the current New Jersey Warn law (“NJ WARN”). The amendments were originally scheduled to take effect on 19 July 2020. However, COVID-19 delayed implementation of the amendments. The new effective date is now 10 April 2023. The NJ WARN law as outlined below will be the most restrictive and potentially most costly of all states who have enacted similar laws.
NJ WARN applies to employers that employ 100 or more employees within and without the state, and now includes part-time employees in that calculation. As under the prior version of the law if an employer terminates 50 or more employees (including part-timers) employed in New Jersey the employer was required to provide notice to the employee. The new NJ WARN law increases the notice period from 60 days to 90 days. In addition, the severance obligations under the new law have been expanded. Under the old law, severance was only payable in the event the employer failed to provide affected employees the required amount of notice. Under the new NJ WARN law, regardless of satisfying the notice obligation, an employer who triggers NJ WARN will be required to provide each affected employee one week of severance for each year of service. If the employer fails to provide the required notice to any affected employee, the severance obligation is increased by an additional 4 weeks of pay.
The NJ WARN law also permits lawsuits for compensatory damages, which includes claims for lost wages (capped at the amount of severance pay required under the NJ WARN law), benefits, and other remuneration plus the recovery for reasonable attorneys' fees and costs. The remedies available to employees can be in addition to remedies available under the federal Worker Adjustment and Retraining Notification Act (WARN). Where an employer violates both WARN and the NJ WARN law, the employee gets the higher amount of damages available under both of these laws.
The NJ WARN amendments are being challenged in federal court on the grounds that they are preempted by the Employee Retirement Income Security Act (ERISA). We will continue to monitor whether the challenge is successful.
