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NJ Becomes First State to Require Severance for Mass Layoffs ?

Dive Brief:

  • New Jersey Gov. Phil Murphy, D, signed a law (S-3170/A-5145) Jan. 21 that requires increased notice time, as well as severance pay, for certain plant closures, transfers and mass layoffs.
  • The law, which takes effect July 19, requires employers with 100 or more employees to provide at least 90 days’ notice of any move or closure that will result in a layoff of 50 or more employees over a period of 30 days or less. The previous notice period was 60 days and part-time employees now count toward the 100-employee threshold.
  • Terminated employees must receive one week’s worth of severance pay for each full year of employment, and employers who fail to provide the required notice must provide affected employees with an additional four weeks of pay.

Dive Insight:

According to law firm Seyfarth Shaw, New Jersey’s law is “the first of its kind in the United States” and goes well beyond the requirements of the federal Worker Adjustment and Retraining Notification (WARN Act).

The WARN Act, according to the U.S. Department of Labor, requires employers with 100 or more employees (generally not counting those who have worked less than six months in the last 12 months or those who work an average of less than 20 hours a week) to provide at least 60 calendar days’ advance written notice of a plant closing or mass layoff affecting 50 or more employees at a single site. The law provides some exceptions when layoffs occur due to unforeseeable business circumstances, faltering companies or natural disasters.

Many states have their own “mini-WARN” laws that provide workers with greater protections than are required by federal law, though the New Jersey law is unusually sweeping, Seyfarth Shaw pointed out.

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