When a company lays off a large number of its employees, that action not only affects the people who have lost their jobs and their families. A mass layoff can affect an entire city and even beyond.
New Jersey, which is home to many corporations of all kinds, has certainly seen more than its fair share. For example, in 2017, Toys R Us, which was headquartered in Wayne, laid off about 2,000 employees. That was, in part, the impetus for legislation sponsored by one New Jersey state lawmaker that became effective earlier this year. It expands a law already on the books called the New Jersey WARN Act. WARN is an acronym for “Worker Adjustment and Retraining Notification.”
How has the WARN Act been expanded?
The law applies to businesses with at least 100 full-time employees when a layoff involves at least 50 employees if that business has been operating in New Jersey for at least three years. Those employees don’t have to work at the same location if a business has multiple locations throughout the state.
These are two key components of the new law:
- Employees must get a minimum of 90 days’ notice. That’s 30 days more than was previously required.
- Both part-time and full-time employees must receive severance pay totaling a week for every year they’ve worked for the company. Part-time employees weren’t previously guaranteed severance.
Companies that fail to comply must provide impact employees with an additional four weeks of severance pay.
“Exploiting bankruptcy laws”
Businesses are not shielded from the law if they’ve filed for bankruptcy, which often involves large layoffs. As the lawmaker behind the changes to the WARN Act says, “Companies and hedge fund managers have been exploiting bankruptcy laws to protect their profits while workers lose their jobs, their paychecks and severance pay. The workers were left in the dark and cheated out of deserved compensation while the companies were pillaged for their resources….”
Most people who have been in the workplace for a number of years have experienced at least one mass layoff. If you’re among them, it’s crucial that you understand what your rights are. Don’t rely simply on what your employer tells you – particularly if it doesn’t seem fair. Be sure you understand the law. That may involve seeking legal guidance if you believe your employer isn’t abiding by their obligations and honoring your rights.