Federal and State WARN Act Obligations for Coronavirus-Related Layoffs

American Health Law Association (AHLA)

Patrick G. Brady, Member of the Firm, and Julie Saker Schlegel, Associate, in the Employment, Labor & Workforce Management practice, in the Firm’s Newark office, co-authored an article in American Health Law Association (AHLA)’s weekly newsletter, titled “Federal and State WARN Act Obligations for Coronavirus-Related Layoffs.”

Following is an excerpt:

With increasing economic disruption caused by the current coronavirus pandemic, many employers are facing the difficult decision to implement widespread worksite closures, layoffs, or furloughs, either due to their own financial situation or to facilitate employees’ eligibility for the enhanced unemployment benefits being offered by the federal government. The sudden and unanticipated nature of these separations has raised a number of issues regarding the applicability of the federal WARN Act and one of its state counterparts, New Jersey’s Millville Dallas Airmotive Plant Job Loss Notification Act (NJ WARN Act).

Both the federal and NJ WARN Acts currently require covered employers to provide at least 60 days’ advance notice to employees who suffer a “loss of employment” due to the shutdown of a worksite or a “mass layoff.” To further complicate matters, an amendment of the NJ WARN Act was originally scheduled to take effect on July 19, 2020 that imposes even more stringent requirements, including a 90-day notice period, severance pay for all affected employees, and the aggregation of all New Jersey worksites to determine whether the applicable employee threshold for a mass layoff or termination of operations has been met. However, in light of the coronavirus pandemic, Governor Phil Murphy signed a new bill, S.2353, into law on April 14, 2020, that postpones the effective date of the amended NJ WARN Act’s requirements until 90 days after the termination of the State of Emergency and Public Health Emergency declared by Governor Murphy on March 9, 2020. The state’s Public Health Emergency was most recently extended effective July 2, 2020, and by law will expire on August 1, 2020, unless it is extended further.

In addition, both the federal and NJ laws have similar, but slightly different, exceptions that should permit covered employers to provide less notice than otherwise required, due to the unforeseeable business circumstances caused by the coronavirus pandemic. Several other states also have their own WARN laws, with somewhat different requirements. The following is a summary of the key provisions of the federal WARN Act and the current and amended versions of the NJ WARN Act, the notable differences between the three, and a brief discussion of the requirements under the “mini-WARN” acts of New York, California, and Illinois, may prove helpful in evaluating employers’ notice requirements for coronavirus-related layoffs and worksite closures in those states.