NEW JERSEY – The landmark worker protection law that requires advance notification and severance pay in cases of mass layoffs would take effect immediately, according to legislation sponsored by Senator Joe Cryan that was approved by a Senate committee last week.
The original law, authored by Senator Cryan and Senator Nellie Pou, was enacted by Governor Murphy in January 2020, but was put on hold because of the Covid public health crisis and the resulting disruptions to the job market.
New Jersey was the first state in the country to enact a law guaranteeing severance pay in the wake of mass layoffs.
“Now that the public health crisis is subsiding, it is time to put these worker protections into place,” said Senator Cryan (D-Union). “Companies and hedge funds have exploited bankruptcy laws to protect their profits while workers lose their jobs, their paychecks and often get cheated out of severance pay. The workers were left in the dark as companies were pillaged for their resources. The law will be upgraded to better protect the rights of the workers.”
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.
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. The law also requires severance pay equal to one week for each year of service.
“In these still stressful, uncertain times, finding and hanging on to a job is a critical part of life for working families,” said Senator Pou (D-Passaic/Bergen). “When a large company unexpectedly closes, their employees are often left out in the cold with little in the way of compensation, and little lead time to locate another job. Workers of New Jersey deserve at least some protections against sudden unemployment, and this law will help provide that cushion.”
The 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.
The bill was approved by the Senate Labor Committee with a vote of 5-0.