17 April 2020 New Jersey revised WARN Act to provide employer relief during emergencies such as COVID-19 On April 14, 2020, Governor Phil Murphy signed into a law AB 3938, a modification to New Jersey's Worker Adjustment and Retraining Notification (WARN) Act to provide employer relief from its requirements for natural disasters and emergencies such as COVID-19. As previously reported (see EY Tax Alert 2020-0113), Governor Murphy approved legislation (S 3170) earlier this year that amended the state's WARN Act by, among other things, mandating severance payments to employees who are part of a mass layoff and requiring a 90-day notice to employees of an upcoming mass layoff. These amendments were set to go into effect on July 19, 2020. AB 3938 changes the definition of "mass layoff" to exclude from its definition layoffs that have occurred as a result of a national emergency or other circumstances such as fire, flood, natural disaster, act of war, civil disorder, industrial sabotage and decertification from participation in federal Medicare or Medicaid programs. Accordingly, and effective retroactively to March 9, 2020, mass layoffs in connection with COVID-19 do not trigger compliance requirements under the state's WARN Act. In light of the challenges that employers are facing due to COVID-19, AB 3938 also changes the effective date of the state's amended WARN Act under S 3170 from July 19, 2020 to 90 days after the termination of Governor Murphy's COVID-19 emergency order. New Jersey joins California in taking action to suspend the usual requirements under their state WARN Acts in consideration of the large number of employees who have been suddenly displaced due to COVID-19. The California Employment Development Department (EDD) announced that under Executive Order N-31-20, the 60-day notice requirement under the California WARN Act is temporarily suspended, provided other requirements are met. For more information on California's WARN Act provisions for COVID-19, see EY Tax Alert 2020-0113.
Document ID: 2020-1020 | |||||||||||
