Artificial intelligence is transforming the workplace at breakneck speed. In 2025 alone, tech giants have eliminated more than 77,000 jobs in the name of automation. Analysts warn that up to 85 million roles worldwide could vanish in the next few years. For employers in New Jersey and New York, the question isn’t if AI will affect your team, it’s when and how you’ll manage the fallout. 

Watch: Are you ready to comply with new AI rules?

Can you justify each staffing decision based on AI? 

Before you replace a person due to an algorithm, be sure you can prove the decision was business driven, not arbitrary or discriminatory. Regulators, judges, and juries all look for contemporaneous, objective documentation. 

Treat every AI rollout like any other structural change: 

• Log the business case for adopting the tool (cost, accuracy, turnaround time). 

• Map which tasks the system will absorb and which people skills you will still need. 

• Maintain detailed employee evaluations, coaching notes, and performance improvement plans for anyone whose role may disappear. 

• Apply the same standards to every employee, not just those in AI-targeted roles. 

Handled this way, your files become a shield if a displaced worker claims the layoff was discriminatory or otherwise illegal. 

How do you protect your company when layoffs are challenged? 

Meticulous recordkeeping is only half the defense; the other half is consistency. Ensure that attendance data, sales figures, help-desk metrics, and any other metric that shows the results in your business are collected and stored the same way for every team member. When staff reductions are truly unavoidable, a detailed paper trail demonstrates fair treatment and undercuts any bias claims. 

Best practice checklist: 

• Use precise, neutral language:  Note the date, the incident, the policy violated, and the action taken. 

• Follow up verbal warnings with email summaries. 

• File everything in a secure system that can be produced quickly during audits. 

Why severance terms matter more than ever now 

Severance agreements remain the safest way to close out an employment relationship while limiting future claims and protecting your brand. In New Jersey, severance payments are now compulsory in mass layoffs – one week of pay for every year of service, with an extra four weeks tacked on if you miss the notice deadline. Even where not mandated, thoughtful packages can soften exits, eliminate the risk of a lawsuit, and reassure the team members who stay. 

Key elements to review or add: 

• Clear release of claims that also covers AI-related disputes. 

• Tailored confidentiality and non-disparagement clauses, with carve-outs required under the New York Human Rights Law, the New Jersey Law Against Discrimination, and the National Labor Relations Act (NLRA). 

• Payment and benefit terms spelled out:  Timing, tax treatment, benefit continuation. 

• Clause noting that automation, not misconduct, prompted the employment termination when that is true. 

For more guidance on how to structure severance agreements to comply with the NLRA, take a look at our blog, Severance agreement rules have changed. 

WARN Act notice rules have tightened 

Large staff reductions in New Jersey and New York now apply to more employers and trigger longer notice periods and tougher penalties: 

• The Federal WARN Act still requires 60 days’ notice for employers with 100 or more workers when at least 50 are laid off at one site, or a one third of the workforce is laid off. 

• New Jersey’s WARN Act requires 90 days’ notice, counts part-timers in the 100-employee threshold, and mandates automatic severance pay, even if you meet the deadline. 

• New York’s WARN Act requires 90 days’ notice, but with lower triggers (25 full-timers for employers with 50 or more workers, or 25 percent of the workforce). In addition, each notice must state the reason for the layoff, AI included. 

We break down New Jersey’s WARN Act requirements, including who is covered, what triggers notice, and how severance must be calculated in our blog, WARNing to NJ employers planning layoffs. 

Your three-step action plan 

• Audit your records – Pull every performance review, coaching email, and AI-impact memo before making final decisions. 

• Refresh templates and calendars – Update severance agreement language, and mark 90-day notice dates for WARN compliance in New Jersey and New York. 

• Consult legal counsel early – AI regulations evolve quickly. Run each major staffing shift by your legal team. 

Handled with foresight and care, increased use of AI in your business can show employees, investors, and regulators that your company leads with both innovation and integrity. 

Have you reviewed your AI policies and layoff procedures lately with an employment attorney? If not, now is the time. 

Do you need ongoing help with these and other employment issues? Check out our Peace of Mind package.

You can always: 

Call us at:  973.787.8442  

Email: legaladmin@alixrubinlaw.com

This blog is for informational purposes only. It is not offered as legal advice, nor is it intended to create an attorney-client relationship with any reader. Consult with competent local employment counsel to determine how the matters addressed here may affect you.

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