NJ Employee Protection Law for Mass Layoff Now in Effect

The landmark worker protection law that requires advance notification and severance pay in cases of mass layoffs would take effect this year, according to legislation sponsored by Senator Joe Cryan and Senator Fred Madden that was signed into law today by Governor Phil Murphy.
The original law, authored by

Senator Joseph P. Cryan (D)

and Senator Nellie Pou, was enacted by Governor Murphy in January 2020, but was put on hold because of the public health crisis and the resulting disruptions to the job market. The Cryan-Madden bill, S-3162, will put the protections in the WARN Act into effect in 90 days.

“Now is time to put these worker protections into place,” said Senator Cryan (D-Union). “Companies and hedge fund managers have been exploiting bankruptcy laws to protect their profits while workers lose their jobs, their paychecks and severance pay. The workers were left in the dark and cheated out of deserved compensation while the companies were pillaged for their resources. The law will help protect the rights of the workers from these abuses.”

New Jersey was the first state in the country to enact a law guaranteeing severance pay in the wake of mass layoffs. The worker protection law increases the pre-notification time and requires severance pay for business closings, mass layoffs and transfers under the Worker Adjustment and Retraining Notification (WARN) Act.

“When companies fall on hard times, and are going through significant layoffs, it is necessary to ensure severance for hard working employees,” said Senator Madden (D-Camden/Gloucester). “With growing fears of additional mass layoffs, especially within the tech industry, this law is more crucial now more than ever to ensure that workers are given the adequate notice and support.”

The law increases the minimum number of days of advance notice from 60 to 90 that employers of 100 or more full time workers must give when there is a mass layoff, plant closing or transfer that will result in 50 or more employees losing their jobs. It also requires severance pay equal to one week for each year of service.

The original law was enacted in response to a rash of business closings and bankruptcies that left workers jobless and without severance compensation. The bankrupt companies were often purchased by private equity firms that imposed massive layoffs while top executives walked away with millions of dollars in bonuses.

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Jon L. Gelman of Wayne, NJ, is the author of NJ Workers’ Compensation Law (Thomson-Reuters) and co-author of the national treatise, Modern Workers’ Compensation Law (Thomson-Reuters). For over five decades, the Law Offices of Jon L Gelman 1.973.696.7900 jon@gelmans.com have represented injured workers and their families who have suffered occupational accidents and illnesses.