16 January 2020 New Jersey legislature passes bill that would require severance pay in event of a mass layoff and employee notice requirements in connection with changes in ownership Legislation recently passed by the New Jersey 2018–2019 state legislature (S 3170) would mandate severance payments to employees who are part of a mass layoff and require a 90-day notice to employees of an upcoming mass layoff. Advocates say the law, if enacted, will be the first of its kind in the US. The governor is expected to sign the bill into law. A "mass layoff" would be defined as a reduction in force that is not the result of a transfer or termination of operations and that results in the termination of employment at an establishment during any 30-day period for 50 or more full- or part-time employees working at or reporting to the establishment. Under current law, the term "mass layoff," as used for notice purposes, refers to an employer of 500 or more full-time employees laying off employees representing one-third or more of the full-time employees. The bill would extend the current 60-day employee notice requirements to 90 days prior to the mass layoff for employers of 100 or more employees. The 100-employee threshold would include part-time and full-time employees. Under current law, the requirement to pay severance pay pertains to employers of 100 or more full-time employees that failed to give a 60-day notice to employees. Under S 3170 in the case of a mass layoff, severance pay would be required for all laid-off employees in an amount equal to one week of pay for each full year of employment, regardless of whether the employer provides the required notice. And, under S 3170, an additional four weeks of severance pay would be required if the employer failed to give the required 90-day notice. S 3170 also provides that in the case of an acquisition (or bankruptcy proceeding), predecessor employers would be required to give employees a 15-day notice of the change in ownership. In this 15-day period, the predecessor employer would also be required to give the successor employer detailed information regarding the predecessor's employees. S 3170 would also limit the successor employer's ability to discharge a predecessor employee for two years after a 180-day transition period unless the Commissioner approves a reduction in the workforce. Additionally, during the transition period, the successor employer is prohibited from reducing an employee's total compensation or to terminate an employee without cause. S 3170 would result in New Jersey law not conforming to the current mass layoff notice requirements under the federal Worker Adjustment and Retraining Notification Act (WARN). WARN requires certain employers to give a 60-day notice of a mass layoff to employees. For more information on the federal requirements, go here. Should S 3170 be officially enacted, concern is that other states will similarly create unique employer requirements, both monetary and otherwise, in connection with mass layoffs and mergers/acquisitions.
Document ID: 2020-0113 | |||||||||
