Layoffs, facility closures and operational moves involve more than selecting an employment termination date and preparing an employee announcement. Depending on the employer’s size and the number of employees affected, federal and state WARN laws may require months of advance notice and significant severance payments.
For those not familiar with it, the WARN Act (WARN stands for Worker Adjustment and Retraining Notification) is a federal law, with additional requirements in some states, that requires certain employers to provide advance notice before large layoffs, plant closings or major operational moves. Its purpose is to give affected employees and communities time to prepare for the job losses.
The most important advice is simple in this case: Involve employment counsel before the decision is announced and before relocation plans and employee communications are finalized. Once executives commit to a timeline, correcting a WARN Act misstep could be difficult or expensive.
New Jersey’s WARN Act is particularly demanding
New Jersey’s WARN Act applies to employers with 100 or more employees when a transfer or termination of operations, or a mass layoff, results in 50 or more employees losing their jobs during a 30-day period. Part-time employees must be counted when determining whether the thresholds are met.
A covered “establishment” may include one New Jersey location or a group of locations throughout the state. Employers therefore cannot automatically review each office or facility separately when determining whether 50 employees are affected.
Covered employers generally must provide at least 90 days’ written notice before the first employment termination. Notice must go to affected employees, union representatives, the New Jersey Department of Labor and Workforce Development, and the appropriate municipal official.
New Jersey also requires severance payments equal to one week of pay for every full year of employment. If the employer fails to provide the full required notice, an additional four weeks of pay is owed. Statutory severance cannot be waived without approval from the Commissioner of Labor or a court.
These obligations can dramatically affect the cost and timing of a restructuring.
New York also requires 90 days’ notice
New York’s WARN Act applies to employers with 50 or more full-time employees. It may be triggered by a plant closing affecting 25 or more employees, certain mass layoffs, relocations or significant reductions in working hours.
Covered employers generally must provide 90 days’ notice to affected employees, their representatives, workforce agencies and certain local government entities. Failure to comply can result in back pay, benefits and civil penalties.
New York employers also must review layoffs across rolling 30-day and 90-day periods. Dividing one reduction in force into smaller groups will not necessarily avoid WARN coverage.
Pennsylvania generally follows federal WARN
Pennsylvania does not currently have a separate statewide WARN law comparable to New Jersey or New York. Employers generally follow the federal WARN Act, which applies to employers with 100 or more employees and requires 60 days’ advance notice of a plant closing or mass layoff.
Federal WARN covers a plant closing affecting at least 50 employees at one site, or a mass layoff involving at least 500 employees — or 50 to 499 employees when they represent at least one-third of the workforce.
Moving work does not automatically avoid WARN
WARN issues can arise even when a business is not shutting down entirely. Moving a department, consolidating facilities, transferring operations, outsourcing a function or offering jobs at a new location still may trigger notice obligations.
Whether a transfer offer prevents an “employment loss” may depend on the distance to the new location, when the offer is made, whether the position is comparable and whether employment will be interrupted.
Speak with employment counsel before finalizing the plan
Counsel can help determine which employees and locations must be counted, whether layoffs must be aggregated, whether state and federal laws overlap, what notices must say and how severance pay should be calculated.
The order of operations matters. Evaluate WARN coverage first, establish legally compliant dates, prepare notices and severance documents, and only then communicate the decision. Early legal review may preserve options that disappear once the timeline becomes public.
If you are preparing a layoff, closure, consolidation or operational move, Rubin Employment Law can help you determine how best to proceed. Reach out to us at 973-787-8442 or 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 a competent local employment counsel to determine how the matters addressed here may affect you.
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