WARN

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New Jersey may have started a trend. As of April 10, covered New Jersey employers must now comply with new requirements under the New Jersey mini-WARN Act (see our blog here). New York and California are giving chase, with proposed amendments to New York State’s WARN Act regulations, New York State’s WARN Act, and California’s WARN Act. And New York employers should take note: New York’s WARN Portal is set to go live this month.

Proposed Amendments to NYS WARN Regulations–And a New NYS WARN Portal

The New York State Department of Labor has proposed amendments to the New York State WARN Act (“NYS WARN”) regulations that are intended to account for the post-pandemic workforce, including clarifying how remote work impacts NYS WARN compliance and simplifying language to ensure employers understand their obligations under the law. The Department of Labor is accepting comments to the proposed regulations until May 30, 2023. 

Key items in the proposed amendments to the NYS WARN regulations include:

  • Remote employees included in threshold count: The employers covered by NYS WARN has been expanded to include any employer who employs 50 or more full-time employees, who work at the single site of employment plus individuals that work remotely but are based at the employment site, which may include remote employees in New York as well as other states.
  • Certain notices must be provided electronically: Notices being sent to the New York State Department of Labor Commissioner (“Commissioner”) must be provided electronically and are no longer required to have original signatures.
  • Notice must include additional information: The notice to the Commissioner must include more detailed information about the affected employees, including telephone numbers, job titles, and whether they are paid on an hourly, salary or commission basis. The notice to affected employees must include any other information relevant to their separation, such as information related to any financial incentives an employee may receive if they remain employed by the employer until the effective date of the employment loss, as well as available dislocated worker information.
  • The exceptions for notice are changing:
    • Faltering company exception reduced: The faltering company exception will apply only to plant closings, and will no longer apply to mass layoffs, relocations or reductions in hours.
    • Unforeseeable business circumstances exception expanded: The unforeseeable business circumstances exception will be expanded to expressly include in certain circumstances a public health emergency (including a pandemic) or a terrorist attack.
    • Exception to notice requires determination by Commissioner: The 90-day notice period can be reduced in limited circumstances (including under the faltering company, unforeseeable business circumstances, and natural disaster exceptions) only if:
      • The employer submits a request for consideration for eligibility of an exception to the Commissioner within 10 business days of providing the required notice under NYS WARN to the Commissioner (unless the Commissioner grants an extension);
      • The employer provides a reason for reducing the notice period in addition to any other documents the Commissioner may require; and
      • The Commissioner determines that the employer has established all of the elements of the claimed exception.
  • The calculation of back pay is being clarified for hourly employees: The calculation to be used to determine the average rate of compensation and final rate of compensation for hourly employees is clarified. Such calculation uses the number of hours worked instead of the number of days worked. The days worked method of calculation should still be used for non-hourly employees.
  • The use of payment in lieu of notice is being clarified: Liability for an employer’s failure to give the required notice to employees under NYS WARN will be reduced by amounts paid to an employee in lieu of notice, except where the following conditions are met (then such payments will be considered wages for the notice period):
    • There is an employment agreement or uniformly applied company policy that requires the employer to give the employee a certain amount of notice before a layoff or separation;
    • The employee is laid off without the required notice; and
    • The employer pays the employee an amount equal to the employee’s wages and any benefits for the required notice period.

Continue Reading Employer WARN-ING: Potential Changes to New York’s and California’s WARN Acts Barreling Down the Turnpike

Effective April 10, covered New Jersey employers must comply with new requirements under the New Jersey mini-WARN Act. New Jersey will join New York and Maine as one of three jurisdictions where employers are required to provide 90 days’ advanced notice to affected employees. (See our prior blog here).

Key changes to NJ-WARN include the following:

  • The employers covered by NJ-WARN has been expanded by the amendments, to include any employer who employs 100 or more employees, whether full-time or not (previously it required employment of 100 or more full-time employees).
  • The threshold for a “mass layoff” triggering NJ-WARN has been reduced significantly. Under the amended law, a “mass layoff” means the termination of 50 or more employees at a covered establishment in a 30-day period. Previously, a mass layoff meant (i) the termination of 50 or more employees comprising 1/3 of the workforce at the establishment, or (ii) the termination of 500 or more employees.
  • The scope of employees that count toward the 50-employee threshold for a “mass layoff” has been expanded:
    • Both employees “at” the establishment and “reporting to” the establishment are counted, which may include remote employees in New Jersey as well as other states. Prior to the amendments, the threshold for a mass layoff included 50 or more employees “at” the establishment.
    • Both part-time and full-time employees must be counted toward the threshold. Previously, only full-time employees counted toward the threshold.
  • The definition of a covered “establishment” has been expanded to include a non-contiguous group of locations / facilities of an employer within the State (previously it applied to contiguous worksites / office parks of an employer). Based on the amendment’s legislative history, this appears to be aimed at retail companies with multiple locations in the State. However, it is unclear how this could apply to largely or entirely remote workforces, and how it “squares” with the inclusion of remote, out of state, employees in the 50 employee threshold.
  • Covered employers will be required to provide at least 90 days’ notice (as opposed to the prior 60 days’ notice) before the first termination of employment occurs in connection with a termination or transfer of operations, or mass layoff. If the employer fails to provide 90 days’ notice, the employer is required to provide the terminated employee with four weeks of pay (which is a new requirement) in addition to statutory severance (see next bullet point).
  • In addition to notice, covered employers will be required to provide severance pay equal to one week of pay for each full year of employment to each terminated employee. (Previously, the law required one week of severance pay for each year worked only if the employer failed to provide the required 60 days’ notice.)

Overall review of NJ-WARN amendments

Here’s a quick review of what will be required once the amendments take effect.

Triggering events

NJ-WARN applies to employers with 100 or more employees anywhere in the US, when:

  • A covered establishment transfers or terminates operations which results, during any continuous period of not more than 30 days, in the termination of 50 or more employees; or
  • An employer conducts a mass layoff (i.e., termination of 50 or more employees in a 30-day period) at a covered establishment.

Terminations for cause or poor performance excluded

Although NJ-WARN’s “termination of employment” definition excludes (1) voluntary departures, (2) retirement, and (3) terminations for misconduct, the statute does not clearly specify whether ordinary terminations for cause or poor performance can trigger its requirements. But our research into NJ-WARN’s legislative history strongly suggests that terminations for cause or poor performance are not covered by NJ-WARN. In the February 27, 2006 New Jersey Assembly Labor Committee hearing, NJ-WARN’s lead senate sponsor clarified that the legislation was not intended to apply to employees terminated for poor performance.

Note on aggregation

Under the new amendments, an employer whose layoff decision affects employees at multiple New Jersey worksites may be subject to NJ-WARN’s notice and severance requirements even if less than 50 employees are terminated at each individual worksite.

To determine whether a termination or transfer of operations or mass layoff is subject to NJ-WARN’s notification requirements, employers generally must aggregate any terminations of employment for two or more groups at a single “establishment” occurring within any 90-day period. If the aggregate number of terminations of all the groups is 50 or more, then the terminations are subject to NJ-WARN’s notice and severance requirements (unless the employer can demonstrate that each group’s cause of terminations is separate and distinct from the other groups’ causes). And since the definition of an “establishment” has been expanded to include an employer’s non-contiguous group of locations / facilities within New Jersey, multi-site employers should consider the aggregate impact of any layoff decision affecting multiple worksites.

Remote workforce

NJ-WARN’s updated “mass layoff” and “establishment” definitions have also created some ambiguity regarding the statute’s application to remote employees. Specifically, a “mass layoff” now includes employees “at or reporting to” the “establishment.” And since “establishment” has been amended to include “a group of locations,” there is an argument that terminated remote employees should be counted for purposes of determining NJ-WARN applicability. But the legislative history of the NJ-WARN amendments suggests the changes were aimed at retail companies with multiple locations in New Jersey, and therefore NJ-WARN’s application to remote employees remains unclear.Continue Reading Next Month NJ Employers Must Comply With New Not-So-Mini Obligations Under Its Mini-WARN Act

As we find ourselves firmly in the middle of Q1 of 2023, the avalanche of layoff headlines that started last quarter just keeps coming. Whether you follow the school of thought that the US entered a recession in summer of 2022 (after two consecutive quarters of negative gross domestic product) or not (given a strong labor market and corporate earnings growth), more and more companies are having to address overzealous pandemic hiring and the backlash from soaring company valuations. One comparatively “easy” place for multinational companies to cut costs — US workforces, where employment is generally “at-will” and absent contractual entitlements or triggering statutory notice requirements, layoffs can be carried out relatively quickly. With that said, as always, moving too quickly can create headaches that actually can be avoided — or at least dulled — with a little planning. 

Here are four tips to keep in mind when planning layoffs in the US:

  1. Beware of the WARN(ings)  

Larger layoffs have the potential of triggering the Worker Adjustment and Retraining Notification Act of 1988 (WARN Act) (and analogous state laws, known as state “mini-WARN acts”) statutes. These statutes impose notice and information obligations, which can be tricky to keep track of, and carry potentially heavy penalties for noncompliance.

Federal WARN requires employers to give advanced notice to affected employees in the event of a covered mass layoff or plant closing. Under the WARN, employers must provide 60 days’ notice of termination to the impacted employees, union representatives (if applicable), and certain government authorities. Under some state mini-WARN acts, 90 days’ notice is required. Click here for more on WARN.

  • Tip: WARN should become part of the layoff checklists (again), with teams (re)sensitized to the impact on timing and costs if triggered.

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