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Six months ago, prior to the COVID-19 pandemic in the United States, New Jersey became the first state in the nation to pass a law obligating employers to provide severance to employees affected by a mass layoff. On January 21, 2020, New Jersey Governor Phil Murphy amended the existing New Jersey Worker Adjustment and Retraining Notification Act (NJ WARN Act). The new amendments, originally scheduled to go into effect on July 19, 2020, require that employers provide severance to each laid-off employee in the amount of one weeks’ pay for each year of employment. Previously under the NJ WARN Act, employers were only obligated to provide severance in connection with a covered mass layoff only if they failed to comply with the required 60-day notice. The new law will ultimately make it drastically more expensive for companies to conduct a large- scale reduction in force in New Jersey.
The significant changes to the NJ WARN Act include:
When the law was passed, the state and nation had no way of knowing that, in a matter of weeks they would be facing a national health crisis. Given the massive labor disturbance and resulting economic impact caused by COVID-19, New Jersey amended the NJ WARN Act once again, effective April 14, 2020. The NJ WARN Act now exempts from coverage any mass layoffs resulting from a natural disaster or national emergency (such as COVID-19), and delays the effective date of the amendments that were originally scheduled to take effect on July 19. These exclusions are retroactive to March 9, 2020, and, thereby, exclude any otherwise covered mass layoff from that date forward. This change permitted New Jersey employers to breathe easier, especially those implementing furloughs and layoffs due to the pandemic.
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