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Federal and State WARN Act Obligations for Coronavirus-Related Layoffs

  • July 17, 2020
  • Patrick G. Brady , Epstein Becker & Green PC
  • Julie Saker Schlegel , Epstein Becker & Green PC

With increasing economic disruption caused by the current coronavirus pandemic, many employers are facing the difficult decision to implement widespread worksite closures, layoffs, or furloughs, either due to their own financial situation or to facilitate employees’ eligibility for the enhanced unemployment benefits being offered by the federal government. The sudden and unanticipated nature of these separations has raised a number of issues regarding the applicability of the federal WARN Act and one of its state counterparts, New Jersey’s Millville Dallas Airmotive Plant Job Loss Notification Act (NJ WARN Act).

Both the federal and NJ WARN Acts currently require covered employers to provide at least 60 days’ advance notice to employees who suffer a “loss of employment” due to the shutdown of a worksite or a “mass layoff.” To further complicate matters, an amendment of the NJ WARN Act was originally scheduled to take effect on July 19, 2020 that imposes even more stringent requirements, including a 90-day notice period, severance pay for all affected employees, and the aggregation of all New Jersey worksites to determine whether the applicable employee threshold for a mass layoff or termination of operations has been met. However, in light of the coronavirus pandemic, Governor Phil Murphy signed a new bill, S.2353, into law on April 14, 2020, that postpones the effective date of the amended NJ WARN Act’s requirements until 90 days after the termination of the State of Emergency and Public Health Emergency declared by Governor Murphy on March 9, 2020. The state’s Public Health Emergency was most recently extended effective July 2, 2020, and by law will expire on August 1, 2020, unless it is extended further.

In addition, both the federal and NJ laws have similar, but slightly different, exceptions that should permit covered employers to provide less notice than otherwise required, due to the unforeseeable business circumstances caused by the coronavirus pandemic. Several other states also have their own WARN laws, with somewhat different requirements. The following is a summary of the key provisions of the federal WARN Act and the current and amended versions of the NJ WARN Act, the notable differences between the three, and a brief discussion of the requirements under the “mini-WARN” acts of New York, California, and Illinois, may prove helpful in evaluating employers’ notice requirements for coronavirus-related layoffs and worksite closures in those states.

Effective Date

Federal WARN Act: February 4, 1989
 
Current NJ WARN Act: December 20, 2007
 
Amended NJ WARN Act: Originally July 19, 2020. However, on April 14, 2020, Governor Murphy signed a bill postponing the effective date until 90 days after the termination of the coronavirus-related State of Emergency and Public Health Emergency he declared on March 9, 2020. The Public Health Emergency is currently scheduled to expire on August 1, 2020, but depending on the circumstances related to the pandemic, may be extended further.

Statutory and Regulatory Provisions

Federal WARN Act: 29 U.S.C. § 2101, et seq.; 20 C.F.R. § 639.1, et seq.
 
Current NJ WARN Act: N.J.S.A. 34:21-1, et seq.; no regulations promulgated.
 
Amended NJ WARN Act: N.J.S.A. 34:21-1, et seq., as amended by S.3170 and S.2353; no regulations promulgated at this time.

Covered Employers

Federal WARN Act: Private employers, including nonprofit organizations, and public/quasi-public agencies which “engage in business,” who have: (1) 100 or more full-time employees, or (2) 100 or more employees, including part-time employees, who work a combined total of at least 4,000 hours per week, excluding overtime. Federal, state, and local government employers are not covered. 29 U.S.C. § 2101(a)(1); 20 C.F.R. § 639.3(a).
 
Current NJ WARN Act: Individual or private business entities that employ 100 or more full-time employees. A covered “establishment” is a single place of employment, or a group of contiguous locations (such as an industrial/office park), which has been operated by an employer for a period longer than three years (excluding temporary construction sites). N.J.S.A. 34:21-1 and 2a.
 
Amended NJ WARN Act: Individual or private business entities that employ 100 or more employees, including part-time employees. A covered “establishment” is a place of employment that has been operated by an employer for more than three years (excluding temporary construction sites). An “establishment” may be a single location or a group of locations, including any facilities located in New Jersey. S.3170 §§ 1, 2(a).

Loss of Employment Giving Rise to a Covered Event

Federal WARN Act: “Employment Loss” means: (a) an employment termination, other than a discharge for cause, voluntary departure, or retirement; (b) a layoff exceeding six months; or (c) a reduction in individual employees’ hours of work of more than 50% during each month of any six-month period. 29 U.S.C. § 2101(a)(6); 20 C.F.R. § 639.3(f).
 
No employment loss will be deemed to have occurred if the plant closing or mass layoff is the result of the “relocation or consolidation” of part or all of the employer’s business and, prior to the plant closing or layoff: (a) the employer offers to transfer the employee to a different employment site within a reasonable commuting distance, with no more than a six-month break in employment; or (b) the employer offers to transfer the employee to any other employment site (regardless of distance) with no more than a six-month break in employment, and the employee accepts within 30 days of the offer or of the plant closing/layoff, whichever is later. 29 U.S.C. §2101(b)(2); 20 C.F.R. §§ 639.3(f)(3), 639.5(b).
No employment loss will be deemed to have occurred when the sale of all or part of a business results in the technical “termination” of the seller’s employees, and the “re-hiring” of those employees by the buyer.[1] 29 U.S.C. § 2101(b)(1).
 
Current NJ WARN Act: “Termination of employment” means the layoff of an employee without a commitment to reinstate the employee to their previous employment within six months of the layoff, except this definition does not include voluntary departure or retirement, discharge or suspension for cause, or any layoff of a seasonal employee. N.J.S.A. 34:21-1.
 
No termination of employment will be deemed to have occurred in any situation where an employer offers an employee the same employment or a position with equivalent status, benefits, pay, and other terms or conditions of employment, at a location inside New Jersey and no more than 50 miles from the previous place of employment. N.J.S.A. 34:21-1.
 
In the case of the sale of all or part of a business, the NJ WARN Act does not provide an express exception to the notice requirements to address the “technical termination” of the seller’s employee’s, prior to being “rehired” by the buyer on the effective date of the sale.
 
Amended NJ WARN Act: The amended New Jersey WARN Act includes the same definition of “termination of employment” as the current version of that law, except it includes a new section addressing the sale of a business. This section applies whenever there is a “change of control” of a business employing 50 or more employees, which is defined as “any material change in ownership of an employer or any filing seeking bankruptcy protection.” S.3170 § 3(a).
 
Under this amendment, a “successor employer” may not terminate a “covered employee” during the 180-day period immediately following the effective date of the change of control, absent cause. A “covered employee” is defined as an individual who has been employed for at least 90 days prior to the change of control, except for “managerial, supervisory, or confidential employee[s],” temporary employees, and part-time employees who worked less than 20 hours per week for at least 90 days prior to the change in control. S.3170 § 3(a), (b).
 
During the 180-day “transition period” following a change of control, the successor employer may only terminate a covered employee if: (i) the Commissioner of Labor and Workforce Development approves a reduction in the workforce; or (ii) the successor employer and a labor organization representing covered employees enter into a collective bargaining agreement which they have agreed supersedes these requirements. Further, for two years after the transition period, the successor employer may only reduce the total number of covered employees if the Commissioner of Labor and Workforce Development approves such an action, after the employer demonstrates, based on a preponderance of the evidence, that it has conducted a study of the nature and scope of the work performed by such employees, and the elimination of the employees is necessary for the continued solvency of the business. No such approval is required with regard to employees terminated for cause “consistent with any applicable collective bargaining agreement.” S.3170 § 3(b), (h).

Definition of “Part-Time” Employee

Federal WARN Act: “Part-Time Employee” means an employee who: (a) is employed for an average of fewer than 20 hours per week; or (b) has been employed for fewer than six of the 12 months preceding the date on which notice is required, including workers who work full-time. 29 U.S.C. § 2101(a)(8); 20 C.F.R. § 639.3(h).
 
Current NJ WARN Act: “Part-Time Employee” means an employee who: (a) is employed for an average of fewer than 20 hours per week; or (b) has been employed for fewer than six of the 12 months preceding the date on which notice is required. N.J.S.A. 34:21-1.
 
Amended NJ WARN Act: Except for the reference to part-time employees in the context of a “change of control,” as discussed above, the amended version of the NJ WARN Act eliminates the concept of part-time employees. Under this amendment, part-time employees are treated the same as full-time employees, in that both must be counted in determining: (a) whether an employer meets the 100-employee threshold for being a covered employer; and (b) whether a termination/transfer of operations or mass layoff meets the 50-employee threshold for required notice. S.3170 § 2(a).

Covered Events

Federal WARN Act: Plant Closing – the permanent or temporary shutdown of a “single site of employment,” or one or more “facilities or operating units” within a single site of employment, if the shutdown results in an “employment loss” for 50 or more full-time employees at the single site of employment during any 30-day period. 29 U.S.C. § 2101(a)(2); 20 C.F.R. § 639.3(b).
 
Mass Layoff – a reduction in force which: (a) is not the result of a plant closing; and (b) results in an employment loss at a single site of employment during any 30-day period for: (1) 500 or more full-time employees, or (2) 50 or more full-time employees representing at least 33% of full-time employees. 29 U.S.C. § 2101(a)(3); 20 C.F.R. § 639.3(c).
 
Current NJ WARN Act: Termination of Operations – the permanent or temporary shutdown of a single establishment operated by the employer for more than three years, or one or more facilities or operating units within a single establishment, that results, “during any continuous period of not more than 30 days,” in the termination of employment of 50 or more full-time employees. “Termination of Operations” does not include a termination made necessary due to a fire, flood, natural disaster, national emergency (such as the coronavirus pandemic, which President Trump declared a national emergency beginning March 1, 2020), or other specified exceptions. N.J.S.A. 34:21-1 and 2.
 
Transfer of Operations – the permanent or temporary transfer of a single establishment operated by the employer for more than three years, or one or more facilities or operating units within a single establishment, to another location (inside or outside New Jersey) that results, “during any continuous period of not more than 30 days,” in the termination of employment of 50 or more full-time employees. N.J.S.A. 34:21-1 and 2.
 
Mass Layoff – a reduction in force that is not the result of a termination/transfer of operations, and that results in the termination of employment at a single establishment operated by the employer for more than three years during any 30-day period for: (a) 500 or more full-time employees; or (b) 50 or more full-time employees representing 1/3 or more of the full-time employees at the establishment. N.J.S.A. 34:21-1. See also the discussion of S.2353, under “Amended NJ WARN Act” below, which excludes layoffs associated with a national emergency or other specified causes from the definition of “mass layoff” effective March 9, 2020.
 
Amended NJ WARN Act: Termination of Operations – the amended NJ WARN Act contains the same definition of “Termination of Operations” as the current version, except that: (a) it applies to a termination that results in an employment loss for 50 or more employees, including part-time employees; and (b) employment losses at all worksites operated by a covered employer for more than three years within the state of New Jersey that occur “during any continuous period of not more than 30 days” must be aggregated to determine if the 50-employee threshold has been met. S.3170 §§ 1, 2.
 
Transfer of Operations - the amended NJ WARN Act contains the same definition of “Transfer of Operations” as the current version, except that it applies to a transfer that results in an employment loss for 50 or more employees, including part-time employees; and (b) employment losses at all worksites operated by a covered employer for more than three years within the state of New Jersey that occur “during any continuous period of not more than 30 days” must be aggregated to determine if the 50-employee threshold has been met. S.3170 §§ 1, 2.
 
Mass Layoff – the amended NJ WARN Act makes several significant changes to the definition of mass layoff, which will now be defined as a reduction in force that is not the result of a termination/transfer of operations and that results in an employment loss during any 30-day period, aggregated across all worksites operated by a covered employer for more than three years within the state of New Jersey, for 50 or more employees, including part-time employees. The previous requirement that, to trigger a “mass layoff,” either 500 employees or at least 1/3 of the employer’s worksite at a single employment site experience a loss of employment has been eliminated under this amendment. S.3170 § 1.
 
S.2353, which was signed by Governor Murphy on April 14, 2020, provides that, effective March 9, 2020, the definition of “mass layoff” will exclude mass layoffs made necessary because of a fire, flood, natural disaster, national emergency, act of war, civil disorder or industrial sabotage, decertification from participation in Medicare and Medicaid, or license revocation. Accordingly, this bill excludes mass layoffs due to the current coronavirus pandemic, which President Trump declared a national emergency effective March 1, 2020, from the requirements of the NJ WARN Act. A similar provision for terminations of operations occasioned by a national emergency or the other causes referenced above was already part of the current NJ WARN Act (see “Exemptions from Notice Requirement – No Notice Required” section, below).

Aggregation of Smaller Events – the 90-Day “Look Back/Ahead”

Federal WARN Act: 90-day look back/ahead – employment losses for two or more groups at a single site of employment, each of which does not affect the requisite number of employees when taken alone, but which do so when viewed in the aggregate, and which occur in any 90-day period, will trigger the notice requirements, unless the employer demonstrates that the employment losses are the result of separate and distinct causes and not an attempt to evade the notice requirements. 29 U.S.C. § 2102(d); 20 C.F.R. § 639.5(a).
 
Current NJ WARN Act: 90-day look back/ahead – “terminations of employment” (as defined above, including layoffs without a commitment to reinstate the employee within six months) for two or more groups at a single establishment, each of which does not affect the requisite number of employees when taken alone, but which do so when viewed in the aggregate, and which occur in any 90-day period, will be regarded as subject to the notification requirements, unless the employer demonstrates that the cause of the terminations for each group is separate and distinct. N.J.S.A. 34:21-2.
 
Amended NJ WARN Act: 90-day look back/ahead plus aggregation of most NJ worksites – the amended NJ WARN Act includes the same 90-day look back/ahead period as the current version. However, it also provides that, for the purpose of determining whether the act’s notice requirements apply, all terminations and/or layoffs at any NJ facility that has been operated by the employer for more than three years, except temporary construction sites, must be aggregated. Per the definition of “terminations of employment,” this aggregation excludes voluntary departures or retirements, discharge or suspension for misconduct, layoff of seasonal employees, and layoffs with a commitment to reinstate the employees to their previous positions within six months. S.3170 §§ 1, 2(c).

Notice Period

Federal WARN Act: At least 60 calendar days’ notice prior to any planned plant closing or mass layoff. When all employees are not separated on the same date, the date of the first individual separation triggers the 60-day notice requirement. When providing notice of a planned employment loss, an employer may refer to a 14-day period during which the employment loss is expected to occur, but the notice must be given at least 60 days in advance of the first day of that period. 29 U.S.C. § 2102(a); 20 C.F.R. §§ 639.5(a), 639.7(b).
 
Current NJ WARN Act: Not less than 60 days (or the period of time required pursuant to federal WARN, whichever is longer) before the first termination of employment. The NJ WARN Act has no provision for providing notice of a “window” period, in lieu of a specific date, during which the separations are expected to occur. N.J.S.A. 34:21-2.
 
Amended NJ WARN Act: Not less than 90 days (or the period of time required pursuant to federal WARN, whichever is longer) before the first termination of employment. Like the current NJ WARN Act, the amended version does not permit the use of a “window” period, in lieu of a specific date, during which the separations are expected to occur. S.3170 § 2(a).

Exemptions from Notice Requirement – No Notice Required

Federal WARN Act: No notice is required when the plant closing is of a temporary facility, or the plant closing or mass layoff is the result of the completion of a particular project, and the affected employees were hired with the understanding that their employment was limited to the duration of the facility or project. 29 U.S.C. § 2103(1); 20 C.F.R. § 639.5(c).
 
No notice is required when a plant closing or mass layoff constitutes a strike or lockout that is not intended to evade the requirements of the federal WARN Act. Non-striking employees may be entitled to notice (although the “unforeseeable business circumstances” or “faltering company” exceptions discussed below may apply, reducing the required amount of notice). 29 U.S.C. § 2103(2); 20 C.F.R. § 639.5(d)
 
Current NJ WARN Act: No notice is required for a termination of operations, transfer of operations, or mass layoff occurring at a temporary construction site or a single place of employment that has not been operated by an employer for a period of more than three years. N.J.S.A. 34:21-1.
 
No notice is required for a termination of operations (i.e., “permanent or temporary shutdown” of a single establishment or one or more facilities or operating units therein) made necessary because of a fire, flood, natural disaster, national emergency, act of war, civil disorder or industrial sabotage, decertification from participation in the Medicare and Medicaid programs, or license revocation under New Jersey’s Health Care Facilities Planning Act. Note that this would include the current coronavirus pandemic, which President Trump declared a national emergency effective March 1, 2020. No similar provision is made for transfers of operations or mass layoffs occasioned by a national emergency or the other causes referenced above under the current NJ WARN Act. N.J.S.A. 34:21-1.
 
However, the newly enacted S.2353 provides that, effective March 9, 2020, the definition of “mass layoff” will exclude mass layoffs made necessary because of a fire, flood, natural disaster, national emergency, act of war, civil disorder or industrial sabotage, decertification from participation in Medicare and Medicaid, or license revocation. Accordingly, this bill excludes mass layoffs due to the current coronavirus pandemic that occur on or after March 9, 2020, from the requirements of the NJ WARN Act. S.2353 § 1.
 
The NJ WARN Act does not include any express exception to the notice requirement for strikes or lockouts.
 
Amended NJ WARN Act: The same provisions as under the current NJ WARN Act apply. S.3170 § 1.

Exceptions to Full Notice Requirement – Notice Required as Soon as “Practicable”

Federal WARN Act: If any of the following exceptions apply, employers need not give the full amount of required notice, but must still provide “as much notice as is practicable” to all designated individuals, including “a brief statement of the basis for reducing the notification period.” 29 U.S.C. § 2102(b)(3); 20 C.F.R. § 639.9.
 
Plant closings or mass layoffs due to any form of natural disaster (e.g., flood, earthquake). The employer must be able to demonstrate that the plant closing or mass layoff is a direct result of the natural disaster. 29 U.S.C. § 2102(b)(2)(B); 20 C.F.R. § 639.9(c).
 
Plant closings or mass layoffs due to “unforeseeable business circumstances” caused by a sudden, dramatic, and unexpected action or condition outside the employer’s control that was not reasonably foreseeable at the time notice would have been required. This includes “an unanticipated and dramatic major economic downturn,” or a “government ordered closing of an employment site that occurs without prior notice,” and may therefore apply to plant closings or mass layoffs associated with the coronavirus pandemic. 29 U.S.C. § 2102(b)(2)(A); 20 C.F.R. § 639.9(b).
 
The “faltering company” exception applies only to plant closings where, as of the time notice would have been required, the employer was actively seeking capital or business that would have enabled it to avoid or postpone the shutdown and the employer reasonably and in good faith believed that giving the required notice would have precluded it from obtaining the needed capital or business. 29 U.S.C. § 2102(b)(1); 20 C.F.R. § 639.9(a).
 
When a layoff originally announced as lasting six months or less is extended because of business circumstances not reasonably foreseeable at the time of the initial layoff, notice must be given at the time it becomes reasonably foreseeable that an extension beyond six months will be required. 29 U.S.C. § 2101(c); 20 C.F.R. § 639.4(b).
 
Current NJ WARN Act: No termination of employment will be deemed to have occurred when a layoff of more than six months which, at its outset, was announced to be a layoff of six months or less, must be extended if the extension of the layoff beyond six months is caused by business circumstances not reasonably foreseeable at the time of the initial layoff, and notice is given at the time it becomes reasonably foreseeable that the extension will be required. N.J.S.A. 34:21-1.
 
The NJ WARN Act does not otherwise provide for a reduction in the notice requirements for a “faltering company” or “unforeseeable business circumstances.” Thus, unless unforeseeable business circumstances associated with the coronavirus pandemic cause a mass layoff originally anticipated to last less than six months to extend beyond that time period, timely notice under the NJ WARN Act will still be required for any mass layoff associated with that pandemic. As noted above, to the extent there is a permanent or temporary “termination of operations” associated with the coronavirus pandemic, no notice is required under the “national emergency” exception to NJ WARN.
 
Amended NJ WARN Act: The same provisions as under the current NJ WARN Act apply. S.3170 § 1.

When Additional Notice Is Required

Federal WARN Act: Additional notice is required when the date or schedule of dates of a planned plant closing or mass layoff is extended beyond the date (or ending date of any 14-day period) announced in the original notice. 20 C.F.R. § 639.10.
 
Current NJ WARN Act: The NJ WARN Act does not expressly provide for a situation in which the actual date of a covered event is extended beyond that provided for in the original notice.
 
Amended NJ WARN Act: The amended NJ WARN Act does not expressly provide for a situation in which the actual date of a covered event is extended beyond that provided for in the original notice.

Who Must Receive Notice

Federal WARN Act: Each representative of the affected employees or, if there is no such representative, to each affected employee; the chief elected official of the unit of local government within which the closing or layoff is to occur; and the state dislocated worker unit. 29 U.S.C. § 2012(a); 20 C.F.R. § 639.6. See also N.J.A.C. 12:40-1.1 and 1.2 (procedures for providing notice to State dislocated worker unit).
 
Current NJ WARN Act: Each affected employee and any representative of collective bargaining units of employees at the establishment (apparently regardless of whether any employees in the particular collective bargaining unit will be affected by the planned separations); the chief elected official of the municipality where the establishment is located; and the New Jersey Commissioner of Labor and Workforce Development. N.J.S.A. 34:21-2a.
 
Amended NJ WARN Act: The same provisions as under the current NJ WARN Act apply. S.3170 § 2(a).
In addition, no later than 15 days before the effective date of a “change of control,” the predecessor employer must: (1) post public notice of the change of control at each principal place of employment of any covered employee, in a conspicuous place in a manner that can be readily viewed by covered employees; (2) send such notice to any labor organization that represents covered employees; and (3) provide the successor employer with the name, address, date of hire, total compensation, and classification of each covered employee. S.3170 § 3(c), (f).

Required Content of Notice

Federal WARN Act: Separate written notice must be given to the representative(s) of affected employees, each affected employee (if not represented), the chief elected official of the unit of local government, and the State dislocated worker unit. The mandated content of each required notice varies slightly, and differs somewhat from the requirements under NJ WARN. 20 C.F.R. § 639.7(b)-(f).
 
Current NJ WARN Act: Separate written notice must be given to representative(s) of collective bargaining unit(s) at the establishment, each affected employee (even if represented), the chief elected official of the municipality, and the New Jersey Commissioner of Labor and Workforce Development (NJDOL). NJDOL has promulgated a required form that employers must use when providing such notice. Online and hard copy versions of this form are available at NJDOL’s website, at https://www.nj.gov/labor/lwdhome/warn/RapidResponse.html. N.J.S.A. 34:21-3a-f.
 
Amended NJ WARN Act: The same provisions as under the current NJ WARN Act apply.
 
The additional notice (discussed above) that must be posted in the workplace and provided to union representative(s) at least 15 days prior to a “change of control” must include: the name and contact information of the predecessor employer; the name and contact information of the successor employer; and the effective date of the change of control. The notice to be provided to the successor employer must include the name, address, date of hire, total compensation, and classification of each covered employee, and must be retained by the successor employer for at least three years. S.3170 § 3(c), (f).

How Notice Is Served

Federal WARN Act: Any reasonable method of delivery that is designed to ensure receipt of notice at least 60 days before separation is acceptable (e.g., first class mail, personal delivery with optional signed receipt). Notice to employees may be enclosed with their paychecks. However, a “ticketed notice” (i.e., a preprinted notice regularly included with each paycheck) will not meet WARN notice requirements.  20 C.F.R. § 639.8.
 
Current NJ WARN Act: The NJ WARN Act does not provide for the manner of delivery. Notice to the Commissioner of the NJDOL may be provided via the online form at the NJDOL website (https://www.nj.gov/labor/lwdhome/warn/RapidResponse.html). The other required notices must be provided via the hard copy notice, available at the same site.
 
Amended NJ WARN Act: The same provisions as under the current NJ WARN Act apply.
 
With regard to the additional notice to be provided at least 15 days before any “change of control,” such notice must be posted in a conspicuous place, in a manner easily viewed by covered employees, at each principal place of employment of any covered employee. S.3170 § 3(c).

Severance Payments

Federal WARN Act: No severance payments are required under federal WARN.
 
Current NJ WARN Act: The current NJ WARN Act only requires severance payments when the employer provides less than the required amount of notice (see “Penalties” section, below). Under such circumstances, each full-time employee who receives less than the required amount of notice is entitled to one week of severance pay for each full year of employment. N.J.S.A. 34:21-2b.
 
Amended NJ WARN Act: The amended NJ WARN Act requires severance payments to all affected employees (full-time and part-time), regardless of the employer’s compliance with the notice requirements. All affected employees are entitled to one week of severance pay for each full year of employment. Employees who receive less than the required amount of notice are entitled to an additional four weeks of severance pay (see “Penalties” section, below). Employers may provide severance pay pursuant to this requirement, or the requirements of any applicable collective bargaining agreement or policy, whichever amount of severance is greater. No waiver of NJ WARN’s severance requirements will be effective unless approved by the NJDOL or a court. S.3170 § (2)(b).
 
While this new severance requirement was originally scheduled to take effect on July 19, 2020, S.2353 (which was signed by Governor Murphy on April 14, 2020) has postponed the effective date of this requirement until 90 days after the termination of the State of Emergency and Public Health Emergency declared by Governor Murphy due to the current coronavirus pandemic. The state’s Public Health Emergency is currently scheduled to expire on August 1, 2020, but depending on the circumstances related to the pandemic, may be extended further.

State Dislocated Worker Unit and Rapid Response Team Services

Federal WARN Act: The U.S. Department of Labor (DOL) “encourages maximum coordination” with respect to state dislocated worker units and worker adjustment programs. 20 C.F.R. § 639.1(f).
 
Current NJ WARN Act: Employers must provide the amount of on-site work-time access to employees that the response team determines is necessary. N.J.S.A. 34:21-2c and 5.
 
Amended NJ WARN Act: The same provisions as under the current NJ WARN Act apply. S.3170 § 2(c).

Enforcement

Federal WARN Act: Private right of action. 29 U.S.C. § 2104(a).
 
Current NJ WARN Act: Private right of action. N.J.S.A. 34:21-6.
 
Amended NJ WARN Act: The same provisions as under the current NJ WARN Act apply.

Penalties

Federal WARN Act: Back pay for each day of violation (circuit split as to whether back pay is computed for each calendar day or each workday during the period of violation).
 
Benefits under an employee welfare or pension plan, including medical expenses incurred during the employment loss which would have been covered under the employee benefit plan if the employment loss had not occurred.
 
At the court’s discretion, reasonable attorney’s fees may be awarded to the prevailing party.
 
Civil penalty of up to $500 for each day of the violation, which “shall not” apply if the employer pays to each aggrieved employee the amount for which the employer is liable to that employee within three weeks from the date the employer orders the shutdown or layoff. 29 U.S.C. § 2104(a).
 
Current NJ WARN Act: One week of severance pay for each full year of employment to each full-time employee to whom the employer provides less than the amount of notice required (with no apparent reduction for partial compliance), which is in addition to any severance pay provided for any other reason (except that back pay provided pursuant to the federal WARN Act is credited toward the NJ WARN severance requirement). N.J.S.A. 34:21-2b.
 
The court “shall” award the prevailing plaintiff(s): (a) costs of the action, including reasonable attorney’s fees, and (b) compensatory damages, including lost wages, benefits, and “other remuneration.” Any award of compensatory damages for lost wages shall be limited to the amount of severance pay required under NJ WARN. N.J.S.A. 34:21-6.
 
Amended NJ WARN Act: The provisions of the current NJ WARN Act apply, except that severance pay owed when the employer fails to provide the required amount of notice: (1) is available to full-time and part-time employees; and (2) is limited to four weeks of severance pay (in addition to the severance pay required for all affected employees, including those who received the required amount of notice, discussed above). S.3170 § 2(b).

Good Faith Defense

Federal WARN Act: Court may, at its discretion, reduce the amount of liability or penalty if the employer proves that an act or omission was in good faith, and the employer had reasonable grounds for believing the act or omission was not a violation of the WARN Act. 29 U.S.C. § 2104(a)(4).
 
Current NJ WARN Act: The NJ WARN Act does not provide for a good faith defense to liability or penalty.
 
Amended NJ WARN Act: The amended NJ WARN Act does not provide for a good faith defense to liability or penalty.

Other States

In addition to the federal WARN Act requirements, which apply nationwide, several other states besides New Jersey have adopted their own “mini-WARN” requirements.
 
New York
 
The NY WARN Act (N.Y. Labor Law § 860, et seq.) requires employers with 50 or more full-time workers in the state to provide 90 days’ notice prior to a plant closing affecting 25 or more workers, or a mass layoff involving either (i) 25 or more full-time workers who constitute at least 33% of workers at the affected site, or (ii) at least 250 full-time workers. Notice must be provided to all affected employees, any union representatives, the New York State Department of Labor, and the Local Workforce Investment Board. The NYDOL has noted that the NY WARN Act’s notice requirement “has not been suspended” due to the current coronavirus pandemic, “because the WARN Act already recognizes that businesses cannot predict sudden and unexpected circumstances beyond an employer’s control, such as government-mandated closures, the loss of your workforce due to school closings, or other specific circumstances due to the coronavirus pandemic.” Employers who are “facing rapid and unexpected closures due to the coronavirus” should “provide notice as soon as possible and identify the circumstances that required the closure” and the shortened notice period. Due to the coronavirus pandemic, employers are “strongly encouraged” to submit WARN notices to NYDOL via email, at [email protected].
 
California
 
The California WARN Act (CA Labor Code § 1400, et seq.) requires employers with 75 or more full-time and/or part-time employees to provide at least 60 days’ notice prior to a plant closing of any size, or a mass layoff affecting 50 or more employees, regardless of percentage of the workforce. Notice must be given to all affected employees, the CA Employment Development Department (EDD), the Local Workforce Development Board, and the chief elected official of each city and county government within which the closing/layoff occurs. While the CA WARN Act ordinarily does not include the federal law’s “unforeseeable business circumstances” exception, Governor Newsom signed an Executive Order suspending the full 60-day notice requirement for mass layoffs or closures that occur between March 4, 2020 and the end of the coronavirus-related CA State of Emergency, provided that: (i) the employer issues the written notices required under CA law; (ii) the employer provides as much notice as is practicable, including a brief statement of the basis for reducing the notice period; (iii) the closure/layoff is “caused by COVID-19-related ‘business circumstances that were not reasonably foreseeable as of the time that notice would have been required,’”; and (iv) such notice includes a statement that, “If you have lost your job or been laid off temporarily, you may be eligible for Unemployment Insurance (UI). More information on UI and other resources available for workers is available at labor.ca.gov/coronavirus2019.” Due to the coronavirus pandemic, notices issued to the CA EDD should be emailed to [email protected].
 
Illinois
 
The Illinois WARN Act (820 ILCS 65/1, et seq.) requires employers with 75 or more full-time employees to provide at least 60 days’ notice prior to a plant closing affecting 50 or more employees, or a mas layoff affecting (i) 25 or more full-time employees who constitute at least one-third of full-time employees at the worksite, or (ii) 250 or more full-time employees. Notice must be given to affected employees, their union representative(s), the IL Department of Commerce and Economic Opportunity, and the chief elected official of each municipal and county government where a closure/layoff occurs. Unlike the federal WARN Act, the IL exception permitting a shortened notice period due to “unforeseeable business circumstances” ordinarily only applies to plant closures, not mass layoffs. However, the state has issued guidance recognizing the “unprecedented challenges posed by the COVID-19 pandemic, including unexpected business closures.” The IL Department of Labor (IDOL) “will provide individual determinations to employers who seek an exception under Section 15 of the Act. To request the determination, the employer must provide IDOL with a written basis describing the basis for reducing the notification period. IDOL will then make an individual determination in an expedited manner. If the request is approved, an employer must provide as much notice as soon as practicable.” Notices should be submitted via email to [email protected], and employers should state in their notice if the layoff/closure is a direct result of the impact the COVID-19 outbreak has had on their business, and include the employer’s federal identification number (FEIN).

Conclusion and Recommendations

Employers who find themselves contemplating an unanticipated worksite closure or mass layoff due to the coronavirus pandemic should be attentive to the many detailed technical requirements of the federal WARN Act, and any applicable state counterparts. While the requirements of these statutes are extremely precise, and courts generally require strict compliance, most such statutes include an exception that permits a shortened notice period due to “unforeseeable business circumstances” (and those that ordinarily do not, such as California and Illinois, may be temporarily recognizing such an exception due to the current coronavirus pandemic).

Employers who are contemplating a closure/layoff related to the coronavirus pandemic should review the federal law and all applicable state WARN statutes to determine whether the “unforeseeable business circumstances” exception may apply, keeping in mind that the availability of this exception may differ by jurisdiction and type of WARN event (i.e., plant closing vs. mass layoff). Note that, if this exception does apply, employers must still provide notice as soon as practicable, and include a statement of the basis for the shortened notice period. Checking the website of the applicable state department(s) of labor for any special submission instructions related to the coronavirus pandemic is also advised.

Under the federal WARN Act, and most state counterparts, the WARN notice requirements are not triggered for mass layoffs/furloughs that are anticipated to last less than six months. However, because under the current circumstances it may be difficult to determine the anticipated duration of any layoffs, unless employers are certain that laid-off employees will be recalled within six months, issuing WARN notices may be prudent. Note that, if a layoff anticipated to be shorter than six months needs to be extended beyond that time frame, or is converted into a permanent plant closure, additional amended notices may be required.

As outlined above, the specific requirements of various jurisdictions’ WARN laws vary in terms of when they apply, who must receive notice, and the mandated contents of each such notice. In light of the distinctions discussed above between the federal and New Jersey WARN obligations, and the changes to the NJ WARN Act that were originally scheduled to take effect on July 19, 2020, but have now been postponed until 90 days after termination of the coronavirus-related State of Emergency and Public Health Emergency declared by Governor Murphy (which is tentatively scheduled to expire on August 1, 2020), employers would be well advised to be familiar with the current and amended New Jersey statute, and the corresponding laws of any other applicable state(s), when considering a plant shutdown or mass layoff, rather than relying solely on compliance with the federal WARN Act.
 

 
[1] With respect to employment losses occurring before or after the sale, “[t]he seller is responsible for providing notice of any plant closing or mass layoff which takes place up to and including the effective date (time) of the same, and the buyer is responsible for providing notice of any plant closing or mass layoff that takes place thereafter.  . . . It may be prudent for the buyer and seller to determine the impacts of the sale on workers, and to arrange between them for advance notice to be given to affected employees or their representative(s), if a mass layoff or plant closing is planned.”  29 C.F.R. § 639.4(c).