New Jersey Severance Law A Potential Bellwether for Similar Legislation in Other States

Governor Phil Murphy of New Jersey recently signed into law an amendment to the NJ WARN Act (the “Act”), which increases the protections afforded to New Jersey employees who face sudden job loss.  The amendment, which will take effect on July 19, 2020, expands the Act’s coverage to encompass part-time employees and new hires, in addition requiring employers to provide 90 days’ notice of mass layoffs (up from the 60-day notice period imposed by the original iteration of the Act).

Most notably, however, the new law will require employers to provide laid off employees with one week of severance for every year of service.  Employers will be on the hook for an additional four weeks of severance per employee if they violate the Act’s 90-day notice provision.  This amendment makes New Jersey the first state in the nation to require severance payments as a matter of law.  Predictably, the amendment has been targeted by management-side advocates in recent weeks out of apparent concern that it could signal a trend toward similar legislation elsewhere.  These concerns are well-founded, as New Jersey has become a trendsetter in pro-worker legislation under the State’s current administration.

Whether management-side attacks can blunt public support for the amended Act and/or Governor Murphy’s worker-friendly agenda, generally, remains to be seen.  Similarly, only time will tell whether the amended Act will be a harbinger for legally mandated severance pay elsewhere in the United States.  For now, employees throughout New Jersey have every reason to celebrate this massive improvement to their job security and financial stability.