We live in a time of economic turmoil. New Jersey’s unemployment rate stands at nine percent, well above the national average. Many New Jersey employees find themselves losing what they thought were secure jobs. Loss of a job can lead to devastating consequences. However, both the Federal and New Jersey WARN Acts require employers to provide advance notice before instituting mass layoffs.
The Federal WARN Act.
The Federal Warn Act was passed by Congress in 1988. It was designed to give workers and their families advance notice of mass layoffs to allow them, and their communities, to prepare for the impact of plant closings. It was passed with a veto-proof majority; it thus became law even though President Reagan did not sign it.
The Federal Warn Act requires 60 days notice to workers (or their union) who are affected by mass layoffs or plant shutdowns. It covers businesses with 100 full or part-time employees who work a combined 4000 hours per week or more. It covers plant shutdowns of at least 30 days which affect at least 50 employees, or mass layoffs affecting at least one third of the workers at a single worksite.
Exceptions to the notice requirements are made for closings or layoffs resulting from unforeseeable events or business circumstances. An employee who did not receive the notice can sue for unpaid wages and the employer may have to cover her attorneys fees, in the court’s discretion, if the failure was not in good faith. The employer may also face penalties.
The New Jersey WARN Act.
New Jersey’s Millville Dallas Airmotive Plant Job Loss Notification Act was enacted in 2007. It was modeled after the Federal Warn Act, and is usually referred to as New Jersey’s WARN Act.
The New Jersey WARN Act applies to businesses and governmental units with at least 100 full-time employees. It applies to closings of at least 30 continuous days which lay off at least 50 or more full-time employees. It also applies to mass layoffs of at least 500 employees, or of at least 50 employees if they represent at least one third of the establishment’s full-time employees.
Like the Federal law, New Jersey’s WARN Act requires employers to give at least 60 days notice of termination, but New Jersey requires notice be given to both the affected employees and their unions. Under the WARN Act, New Jersey severance pay must also be given if the employer fails to give the required notice – the employer must give each one week of severance for each year the employee worked if the required notice is not provided. New Jersey’s Department of Labor also has a “response team” to help with the transition.
New Jersey also provides exceptions for unforeseeable events or business circumstances. It does not provide for penalties in addition to lost wages, but attorneys fees are mandatorily covered by the employer. The Appellate Division has ruled that New Jersey’s WARN Act can apply to parent companies and affiliate.
Bottom Line for New Jersey Layoffs and Plant Closings.
Both the Federal and New Jersey WARN Acts provide a sensible method to lessen the impact of plant closings and mass layoffs on employees, and their families and communities. At the same time, it seeks to make sure that the employee protection itself does not harm businesses by making exceptions for unforeseen circumstances. Thus, all an employer needs to do to comply is to provide notice to its employees when it knows a significant number of them will lose their jobs.
However, compliance with either the Federal or New Jersey WARN Acts will not shield an employer for liability for violating New Jersey’s anti-discrimination or whistleblower protections laws. Likewise, it will not shield an employee from being fired for cause.
However, in the case of mass layoffs, the Federal or New Jersey WARN Acts provide sensible, measured protection.
McLaughlin & Nardi’s New Jersey employment attorneys are experienced at representing both employees and employers in layoffs and a wide variety of labor and employment matters. For more information or to obtain assistance, please visit our website, e-mail us, or call one of our attorneys at (973) 890-0004.