New Jersey law protects employees who are subject to certain types of mass layoffs by entitling them to at least 90 days’ notice before their employment ends, plus one week of severance pay for each year they worked for the company. This law, the Millville Dallas Airmotive Plant Job Loss Notification Act, is commonly referred to as the “NJ WARN Act” because it was modeled after the federal Worker Adjustment and Retraining Notification “WARN” Act.
What Types of Terminations Are Covered by the NJ WARN Act?The NJ WARN Act applies only to employees who lose their job because:
Despite the 30-day period, if an employer has two or more terminations, transfers of operations or mass layoffs during a 90-day period, then they can be combined to determine if at least 50 employees were impacted unless the employer can prove that the cause of each set of terminations was separate and distinct from the causes of the other sets of terminations.
The law defines “establishment” as a place of employment the employer has operated for more than three years, and makes it clear that an establishment can be a single location or a group of locations, including any facilities located in New Jersey.
However, the NJ WARN Act does not apply to employees who leave their jobs voluntarily, are fired for misconduct, are laid off for less than six months, or are offered a comparable job with the same employer that is in New Jersey and within 50 miles from their previous work location.
When Are Employees Entitled to 90 Days of Notice Under the NJ WARN Act?The NJ WARN Act’s requirement to provide employees 90 days of advance notice before their employment terminates applies to employees who lose their jobs as a result of a covered termination of operations, transfer of operations, or mass layoff. However, the 90-day notice requirement does not apply to employers with fewer than 100 employees.
If an employer fails to provide an employee the full required 90 days of notice, then the employee is entitled to an additional four weeks of pay.
When Are Employees Entitled to Severance Pay Under the NJ WARN Act?New Jersey employees whose employment is terminated as a result of a termination of operations, transfer of operations, or mass layoff that is covered by the NJ WARN Act are entitled to severance pay pursuant to it.
How Much Severance Pay Do Employees Receive Under the NJ WARN Act?Employees who are eligible for severance pay under the NJ WARN Act are entitled to one week of severance pay per each full year they worked for the employer.
How is Severance Pay Calculated Under the NJ WARN Act?Severance pay pursuant to the NJ WARN Act is based on the greater of the employee’s “average regular rate of compensation” during their last three years of employment, or their “final regular rate of compensation.”
Although the NJ WARN Act does not define “regular rate of compensation,” other state and federal laws using similar terms have been interpreted to include not only base salary or hourly wages, but also most or all bonuses, commissions and incentive pay.
An employee who wins a claim under the NJ WARN Act is entitled to recover their lost wages, benefits and severance pay. In addition, they can recover their attorney’s fees and costs.
Further, since the NJ WARN Act deems severance pay to be owe to the employee for their past services to the employer, and to be earned in full upon the termination of their employment, it appears to fall within the definition of “wages” under New Jersey’s Wage Payment Law (“WPL”). This is important because the WPL entitles employees who are not paid their wages on time to receive, in addition to their unpaid wages, liquidated damages in an amount equal to up to 200% of their unpaid or belatedly paid wages. In other words, an employee could receive up to three times the amount of any unpaid severance pay.
Learn MoreIf you have a question or potential legal claim under the NJ WARN Act, our New Jersey employment lawyers can help. Please feel free to contact us online or call us at (201) 777-2250.
If you want to read more then you may be interested in our article: New Severance Entitlements to New Jersey Employees Subject to Mass Layoffs.