Updates to the New Jersey WARN Act

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In 2007, the State of New Jersey enacted the “Millville Dallas Airmotive Plant Job Loss Notification Act”, commonly known as the “NJ WARN Act”.  The Act created greater protections for employees by requiring advance notice of closures and mass layoffs.  Employers with a minimum of 100 employees nationwide are subject to the Act’s requirements. The changes are significant and all employers that are impacted by this Act should be aware of the consequences involved. 

Although the State of New Jersey modified the Act back in 2020, the State delayed implementation of the changes until April 10, 2023 due to the COVID 19 pandemic.  In general, these changes broaden both the population of employers subject to the Act and employers’ obligations and liabilities.

Originally, the NJ WARN Act defined a mass layoff as a discharge of a minimum of 500 employees at a given establishment or 50 employees representing at least 33% of the total workforce of a given establishment. Now, the Act applies to employers with at least 100 workers nationwide with one or more establishments in the State of New Jersey and the notification requirement is triggered if a layoff affects at least 50 employees.  The 33% criteria is eliminated from the latest version of the Act.

The definition of “establishment” is important for determining whether an employer needs to give notice.  In the first version of the law, the definition of “establishment” was limited to “a single location or a group of contiguous locations, including groups of facilities which form an office of industrial park or separate facilities just across the street from each other.”  In other words, an “establishment” was generally a site or group of sites in close proximity to each other and an employer had to give notice if the number of layoffs in that location triggered the law.

Under the new language, this definition was broadened to include “any facilities” in the State of New Jersey that have been operated by the employer for a period longer than three (3) years.  Now, rather than counting employees in a specific worksite, an employer reducing their workforce in locations across the State of New Jersey can trigger the notice requirement.

Additionally, while only full-time employees were initially included in the employee count to determine whether an employer is subject to the NJ WARN Act, both full-time and part-time employees now count toward the 100 worker threshold.  Further, the Act’s protections, originally limited to only full-time employees, now extend over both full-time and part-time employees.

The original NJ WARN Act required applicable employers to provide employees with a 60-day notice in the event of an anticipated layoff, closure, or relocation. Now, employers must give at least a 90-day notice.  Moreover, employers with 100 or more full-time employees must pay one (1) week of severance to every impacted employee.  Employees are entitled to one (1) week of severance for every full year of employment.  This severance requirement used to apply only where employers failed to give adequate notice.  Now, a failure to give 90-days’ notice will trigger an additional four (4) weeks of severance for each employee who did not receive timely notice. 

Employers are encouraged to visit https://www.nj.gov/labor/employer-services/warn/ for more information.

EEOC Guidance on COVID in a Post-Emergency World

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On May 11, 2023, the Biden Administration declared an end to the COVID-19 public health emergency.  Long before this declaration, the experience of living through the pandemic created a sense of fatigue and a growing temptation to ignore the existence of COVID as workplaces and other locations reopened.  Employers, however, must still be prepared to address COVID-related issues arising with their employees.  Fortunately, the U.S. Equal Employment Opportunity Commission (“EEOC”) released updated guidance to employers on May 15.  This post summarizes some of the Commission’s guidance.

For those employees receiving COVID-related accommodations, the EEOC does not recommend the automatic cessation of accommodations.  Instead, employers should dialogue with the employees and come to an agreement whether the accommodations remain necessary.  The EEOC update specifically addresses accommodations for employees with “Long Covid,” giving examples of reasonable accommodations depending upon the employee’s symptoms.  Some of these examples include a quiet workspace or use of noise cancelling devices to address brain fog, alternative lighting and reduced glare to address headaches, rest breaks to address joint pain, and a flexible schedule or telework to address fatigue.

Employers should be alert to instances of COVID-related harassment.  It is a violation of the Americans with Disabilities Act to harass an employee with a disability-related need to wear a face mask for protection.  Similarly, it is illegal to harass an employee who did not receive a COVID vaccine based on a religious exemption.  Employers should encourage employees to report any instances of COVID-related workplace harassment so that they can be addressed in a timely manner.

Helpfully, the EEOC guidance answers factually specific questions that commonly arise in the workplace.  For instance, employers are permitted to (i) ask employees who report that they are sick and unable to work whether the employee has COVID or symptoms of COVID; (ii) ask employees who physically enter the office if they have COVID; (iii) continue to screen employees for COVID when they enter the workplace.  Employers can require employees who refuse to comply with COVID screening to stay out of the workplace.  Employers may not ask an employee whether they have family members infected with COVID.

At all times, employers must protect the confidentiality of their employees by safeguarding medical records, including any COVID screening logs.

Employers are encouraged to visit https://www.eeoc.gov/wysk/what-you-should-know-about-covid-19-and-ada-rehabilitation-act-and-other-eeo-laws and read the May 15 updated guidance entitled “What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws.”  

Deadline for NJ Temporary Help Legislation Approaches

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Governor Phil Murphy of New Jersey signed legislation reforming the temporary help service firm industry in the State of New Jersey on February 6, 2023.  According to the language of the legislation, two of its sections take effect after 90 days.  As that 90 day deadline approaches on May 6, 2023, temporary help service firms in New Jersey and their clients should be taking steps to comply.

The first section coming into effect requires the distribution of statements to temporary laborers when they are dispatched to assigned worksites.  The State of New Jersey recently provided a template statement for firms to use.  The statement must contain a variety of information including the name of the employee, contact information for the temporary help service firm, the firm’s worker’s compensation carrier, as well as the third party client.  The statement also must include details about the placement itself such as the nature of the work to be performed, the wages, and employment terms related to transportation, meals and equipment.  Finally, the statement must information about the length of the assignment and work schedule, if known.

Firms must provide these statements to newly hired and assigned employees, as well as existing employees when their employment terms change.

It is important to note that this section does not apply to all temporary laborers, but instead, to  employees working in several designated occupational categories including but not limited to: food preparation; building and grounds cleaning and maintenance; personal care and service occupations; construction laborers; installation, maintenance and repair occupations; production occupations; and transportation and material moving occupations.

In addition to the above notification requirement, temporary help service firms must not assign their workers where a strike, lockout, or other labor dispute exists without informing the workers in writing of the labor dispute at the time of dispatch.

Further, temporary help service firms must, through its own employees or a vendor, provide personnel who can effectively communicate information to all qualifying employees in Spanish “or any other language that is generally understood in the locale of the temporary help service firm.”

Violations of this section are subject to a civil penalty of at least $500 but no more than $1,000 per violation.

The second section coming into effect prohibits temporary help service firms from retaliating against employees for exercising their rights under this law.

Many other provisions of this law are scheduled to take effect in another ninety days.

Changes to the Legality of Non-Compete Agreements on the Horizon

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Employers who rely upon non-compete agreements and non-compete provisions in their employment agreements should prepare to change their practices in the near future.

There is a broad trend across the country disfavoring the use of non-compete provisions.

In January of this year, the Federal Trade Commission proposed a rule that would ban employers from imposing non-compete provisions on their workers.  The rule makes it illegal for an employer (i) to enter into or attempt to enter into a non-compete with an employee, (ii) maintain a non-compete with a worker, or (iii) represent to a worker, under certain circumstances, that the worker is subject to a non-compete.  The rule also requires employers to rescind existing non-competes and actively inform  employees that the non-compete provisions or agreements are unenforceable.  The rule applies to independent contractors and direct employees, whether paid or unpaid.  The public comment period on this rule ends on April 19, 2023.

Closer to home, there are bills proposed in both New York and New Jersey that would severely limit or entirely prohibit the use of non-competes.  Introduced previously, and reintroduced during this legislative session, the bill proposed in New York’s Senate would prohibit all employers from seeking, requiring, demanding or accepting a non-compete agreement from an employee.  The bill appears to apply broadly to most employers and employees.  The bill would also void all existing non-complete agreements.  The bill does, however, distinguish non-compete agreements from other restrictive terms protecting employer trade secrets and confidentiality and specifically states that the latter types of restrictions are not impacted by this bill.

The New Jersey bill limiting non-compete agreements and provisions is more nuanced.  Under the New Jersey bill, non-competes are prohibited for specific categories of workers, namely employees classified as nonexempt under the Fair Labor Standard Act, undergraduate or graduate level paid and unpaid interns, apprentices, seasonal or temporary workers, employees laid off or terminated without a determination of misconduct, independent contractors, employees under the age of 18, low-wage employees, and employees whose period of service is less than one year. 

Any otherwise allowable non-compete agreements must be reasonable in geographic reach and scope and cannotexceed 12 months following termination date.  Generally, the agreement must not “be broader than necessary to” protect the employer’s “legitimate business interests,” including the employer’s trade secrets and confidential information.  See A3715(3)(a)(1).  Non-compete agreements cannot “restrict an employee from providing a service to a customer or client if the employee did not initiate or solicit the customer or client.”  See A3715(3)(a)(9). 

The New Jersey bill imposes certain notice requirements on the employer.  And, importantly, should an employer enforce a non-compete against an employee, the employer must compensate the employee after termination “an amount equal to 100 percent of the pay which the employee would have been entitled for work that would have been performed during the period prescribed” by the non-compete and “continue to make whatever benefit contributions would be required in order the maintain the fringe benefits to which the employee would have been entitled.”  See A3715(3)(d). 

Finally, the New Jersey bill declares “No-poach” agreements void and against public policy, defining such agreement as “any agreement between employers or between an employer acting as a contractor and any legal person acting as a contractee that restricts or hinders the ability of an employer to contract for the services of a low-wage employee.”  See A3715(2).

Under either bill, employees have the ability to bring a lawsuit for alleged employer violations and seek damages, including liquidated damages up to $10,000.

Although neither bill has yet to become law, eventual passage in some form is likely.  Employers should start reviewing their existing practices with respect to non-competes in preparation for these restrictions.

New York Law Update – Laws Related to Paid Time Off and Absence Policies in 2023

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We are nearing the end of the first quarter of the year, but there is still news to report on changes to New York law taking effect in 2023.  This post focuses on laws related to employee time off and absences.

Employers must continue to provide paid leave for COVID-19 vaccinations until the end of this year.  In March of 2021, then-Governor Andrew Cuomo first required employers to provide paid time off to employees for the purpose of receiving COVID-19 vaccinations.  Originally, this law expired at the end of 2022.  Governor Kathy Hochul has now extended the expiration date until December 31, 2023.  The paid time off must be at the employee’s regular rate of pay.

Employers should also be aware of a change in New York law impacting absence control policies.  Governor Kathy Hochul signed a law amending New York law to prohibit employers from penalizing employees for absences when those absences are legally protected.  Under New York law, the definition of employer “retaliation” now includes disciplining employees by assessing points or deductions from a timebank because the employee used legally protected time.  The attendance policy itself remains lawful, but employers should review and revise their application of the policy to avoid violations of New York’s revised law. 

The penalties for maintaining an absence control policy that violates the law are significant. Employers cannot retaliate or discriminate against any employee who makes a complaint that their employer illegally penalized them pursuant to an absence control policy.  The law permits employees to bring a lawsuit to recover monetary damages including back pay, liquidated damages and attorney’s fees. The State can also impose civil penalties in excess of $10,000.00.  This change in the law took effect February 20, 2023.

For more information about this change in the law, employers can read the text of the law, S1958A, at https://www.nysenate.gov/legislation/bills/2021/S1958.

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