Does New Jersey require severance pay for layoffs?

Yes. The 2023 NJ WARN Act amendments made New Jersey the only state in the country that requires mandatory severance for covered mass layoffs. Employers must pay 1 week of severance per year of service to each affected employee. This is in addition to the 90-day notice requirement.

What changed in the 2023 NJ WARN Act amendments?

The 2023 amendments (effective April 10, 2023) made three major changes: they extended the notice requirement from 60 to 90 days, made severance mandatory (previously optional), and eliminated the ability to reduce severance by providing early notice. The amendments also clarified that part-time employees count toward the 100-employee threshold.

How much severance is required under NJ WARN?

One week of severance pay per full year of employment for each affected employee. An employee with 7 years of service receives 7 weeks of severance. If the employer fails to give the required 90-day notice, an additional 4 weeks of severance is owed per employee, on top of the service-based amount.

Does New Jersey have a faltering company exception to WARN?

No. The 2023 amendments eliminated the faltering company exception. Employers in financial distress, actively fundraising, or in acquisition talks must still give the full 90 days notice and pay mandatory severance.

Can employees waive severance under the NJ WARN Act?

The NJ WARN Act severance requirement can be waived by an individual employee as part of a valid settlement or separation agreement, but the waiver must be knowing and voluntary. Blanket prospective waivers in employment contracts are not enforceable.

Resources WARN ActNew Jersey

Complete Guide

New Jersey WARN Act

NJ WARN Act (N.J.S.A. 34:21-1 et seq., as amended 2023)

New Jersey is the only state in the country that requires mandatory severance for mass layoffs. The 2023 amendments added a 90-day notice requirement and eliminated the financial distress exception. Here is everything HR and legal teams need to know before a New Jersey RIF.

Mandatory severance1 week per year of service90-day noticeNo financial distress exceptionAmended 2023

Overview Does NJ WARN apply?Thresholds & triggers Mandatory severance Notice violation penalty 2023 amendments No financial distress exception NJ WARN vs. Federal Who gets notice Common mistakes Penalties FAQ

What is the New Jersey WARN Act?

The New Jersey WARN Act (N.J.S.A. 34:21-1 et seq.) requires employers with 100 or more employees to give 90 days advance written notice before a mass layoff, plant closing, or transfer of operations. As significantly amended in 2023, it also requires mandatory severance payments for all affected employees.

New Jersey is the only state in the country that mandates severance for covered mass layoffs. This single fact makes NJ WARN the most financially consequential state WARN law for employers. A layoff of 100 employees with an average tenure of 5 years means 500 weeks of severance pay before the first separation even occurs.

The 2023 amendments represented a dramatic expansion of employer obligations. Employers familiar with the pre-2023 NJ WARN Act are operating on outdated assumptions.

Does NJ WARN apply to your layoff?

Work through these three questions in order. A No answer to any stops the analysis for that event.

Does the employer have 100 or more employees?

YesContinue to question 2.

NoNJ WARN does not apply. Federal WARN also requires 100+ employees at the site level.

Post-2023 amendments: count includes part-time employees. Employees with fewer than 6 months tenure are excluded.

Will 50 or more employees lose their jobs at a single establishment within any 30-day period?

YesContinue to question 3.

NoCheck whether prior rounds within the last 90 days aggregate above 50. If not, NJ WARN does not apply to this event.

Unlike federal WARN, NJ WARN has no percentage-of-workforce requirement. 50 employees is the only threshold, regardless of site size.

Is the event a mass layoff, plant closing, or transfer of operations?

YesNJ WARN applies. You must give 90 days written notice and pay mandatory severance of 1 week per year of service to each affected employee.

NoNJ WARN does not apply to this event type, though other obligations may.

Transfer of operations means moving or outsourcing work that causes covered employee losses, even without a physical relocation.

Thresholds and triggers

Employer size

The employer has 100 or more employees. Post-2023 amendments include part-time employees in this count.

Same as federal threshold

Layoff size

50 or more employees are laid off within any 30-day period at a single establishment.

No percentage requirement

Covered event

A mass layoff, plant closing, or transfer of operations. Outsourcing that eliminates covered positions is included.

Transfer of operations is NJ-specific

No percentage trigger

Federal WARN requires both 50+ employees and 33% of the workforce. NJ WARN dropped the percentage requirement entirely, like Cal-WARN. If 50 people are laid off at a 5,000-person site, NJ WARN is triggered. Federal WARN would not be (1% of workforce).

Mandatory severance

New Jersey is the only state that requires severance

No other state WARN law mandates severance payments. Federal WARN does not require severance. NJ WARN, as amended in 2023, requires employers to pay 1 week of severance per full year of employment to every employee affected by a covered layoff.

Rate

1 week per year of service

Based on regular rate of pay, not including tips or overtime

Minimum tenure

No minimum

Even employees with less than 1 year receive prorated severance

When paid

At time of termination

Must be paid when the employee's last day of employment occurs

The severance obligation applies regardless of whether the employer provides the full 90-day notice. Giving proper notice does not eliminate or reduce the severance requirement. The two obligations are independent.

Example severance calculation

Employee A: 3 years of service, $1,200/week salary3 weeks severance = $3,600

Employee B: 12 years of service, $2,000/week salary12 weeks severance = $24,000

Employee C: 8 months of service, $1,500/week salaryProrated: approx. 0.67 weeks = ~$1,000

For a layoff of 100 employees with an average of 6 years of service at $1,500/week, the mandatory severance obligation is approximately $900,000.

Failing to give 90-day notice adds 4 more weeks of severance

If an employer does not provide the full 90-day notice, affected employees are entitled to an additional 4 weeks of severance pay on top of the mandatory service-based amount. This penalty is additive, not a replacement.

Severance with and without notice

Full 90-day notice given

1 week per year of service

8-year employee at $1,500/wk = $12,000

No notice given (or less than 90 days)

1 week per year of service + 4 extra weeks

8-year employee at $1,500/wk = $18,000

The 4-week penalty applies per employee for each day of inadequate notice, up to a maximum of 4 additional weeks total per employee. It is not prorated day-by-day against the 90-day period.

The 2023 amendments: what changed

The Millville Dallas Airmotive Plant Job Loss Notification Act was significantly amended effective April 10, 2023. Employers relying on pre-2023 knowledge of NJ WARN are operating on outdated assumptions in at least three ways.

Before 2023

60-day notice required

After 2023

90-day notice required

You need to start the clock 30 days earlier than before. Planning timelines built around federal WARN or pre-2023 NJ WARN are insufficient.

Before 2023

Severance optional (or required only if notice was short)

After 2023

Severance mandatory regardless of notice

The severance obligation now applies even when full 90-day notice is given. Giving proper notice no longer eliminates or reduces the severance requirement.

Before 2023

Part-time employees excluded from employer headcount

After 2023

Part-time employees included in the 100-employee threshold

A company with 80 full-time and 30 part-time employees now has 110 covered employees under NJ WARN, clearing the threshold.

Before 2023

Faltering company exception available

After 2023

Faltering company exception eliminated

Employers in financial distress can no longer rely on this exception to shorten or skip notice. Only unforeseeable business circumstances and natural disasters remain as exceptions.

No financial distress exception

The 2023 amendments eliminated the faltering company exception

Before 2023, NJ WARN included a faltering company exception similar to federal WARN. It is gone. A company that is actively fundraising, in acquisition negotiations, or filing for bankruptcy protection must still give 90 days notice and pay mandatory severance.

The only exceptions that remain are:

Unforeseeable business circumstances
A sudden, dramatic, and unexpected event caused by conditions outside the employer's control. The bar is high. General economic difficulty, a challenging fundraising environment, or a lost customer do not qualify unless the circumstances were genuinely sudden and unforeseeable.
Natural disaster
A flood, earthquake, drought, storm, tidal wave, or similar act of nature that directly caused the layoff or closing.

When an exception applies, employers must give as much notice as practicable and include a written explanation. The mandatory severance obligation is not affected by exceptions to the notice requirement.

NJ WARN vs. Federal WARN

Factor	Federal WARN	NJ WARN (post-2023)
Employer minimum	100+ employees (site-level)	100+ employees (includes part-time)
Notice period	60 days	90 days
Layoff threshold	50+ AND 33% of workforce	50+ employees (no % required)
Mandatory severance	No	Yes: 1 week per year of service
Late notice penalty	Back pay up to 60 days	Back pay + additional 4 weeks severance per employee
Financial distress exception	Yes	No (eliminated 2023)
Unforeseeable circumstances	Yes	Yes
Natural disaster exception	Yes	Yes
Covers part-time in headcount	No	Yes (post-2023)
Aggregation window	90 days	90 days
Covers transfer of operations	No	Yes

Who must receive NJ WARN notice

The 90-day written notice must be sent simultaneously to all of the following:

Each affected employee

Or their collective bargaining representative. The notice must be written and include all required content.

New Jersey Department of Labor and Workforce Development

Notice is submitted to the NJ DOL. The department coordinates rapid response services for displaced workers.

Chief Elected Official of the municipality

The mayor or equivalent of the municipality where the establishment is located. For layoffs spanning multiple municipalities, notice goes to each.

Common NJ WARN mistakes

Most NJ WARN violations since 2023 stem from employers applying pre-amendment assumptions or federal WARN logic.

Believing severance is only owed if notice is short

Pre-2023 NJ WARN tied the severance obligation to short notice. Post-2023, severance is owed regardless. An employer who gives a full 90 days notice still owes 1 week per year of service to every affected employee.

Using a 60-day planning timeline

Federal WARN requires 60 days. Pre-2023 NJ WARN required 60 days. Post-2023 NJ WARN requires 90. An HR team that starts notice preparation 62 days before the first separation is 28 days short under current law.

Excluding part-time employees from the headcount

Before the 2023 amendments, part-time employees were excluded from the 100-employee threshold count. They are now included. A company with 75 full-time and 30 part-time employees has 105 covered employees and clears the threshold.

Not budgeting for severance in RIF financial modeling

NJ WARN severance is a hard legal liability, not a discretionary cost. For a 100-person layoff with average tenure of 5 years at $1,600/week, the mandatory severance is $800,000. Finance teams that model the RIF cost without this line item are significantly underestimating total cost.

Treating the notice and severance obligations as linked

The 2023 amendments decoupled them. Giving full 90-day notice does not reduce severance. Paying severance does not substitute for notice. Both must be satisfied independently. Violating one does not excuse the other.

Not accounting for transfer of operations

NJ WARN covers not just layoffs but also transfers of operations: moving or outsourcing work in a way that causes employee losses. A company that outsources its New Jersey call center to a third-party vendor may trigger NJ WARN for the displaced employees even if no physical plant closes.

Amber bar indicates mistakes most frequently cited in NJ WARN litigation.

Penalties for non-compliance

NJ WARN non-compliance can result in three distinct categories of liability, all of which can apply simultaneously:

Mandatory severance

1 week per year of service

Owed regardless of whether proper notice was given. This liability exists even for a fully compliant employer.

Short notice penalty

+4 weeks severance per employee

Added on top of the service-based severance if the employer fails to provide full 90-day notice.

Civil penalty

$500/day to the state

Payable to New Jersey for each day of notice violation, up to 60 days maximum.

Total exposure example

Employer lays off 75 employees with no notice. Average tenure: 6 years. Average weekly pay: $1,800. Mandatory severance: 75 x 6 x $1,800 = $810,000. Short notice penalty: 75 x 4 x $1,800 = $540,000. Civil penalty: $500 x 60 days = $30,000. Total exposure: approximately $1,380,000 plus attorneys fees.

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Frequently asked questions

If we give the full 90-day notice, do we still owe severance?

Yes. The 2023 amendments made severance mandatory and independent of the notice obligation. Giving proper notice satisfies your notice requirement, but it does not reduce or eliminate the 1-week-per-year severance owed to each affected employee.

Does NJ WARN apply to a company that is headquartered outside New Jersey?

Yes. NJ WARN applies based on where the affected employees work, not where the employer is headquartered. A California company with a New Jersey office must comply with NJ WARN for layoffs at that New Jersey location if the thresholds are met.

Can we offer a different severance package instead of the NJ WARN minimum?

You can offer more, but not less. If your existing severance policy already provides 2 weeks per year of service, that satisfies NJ WARN (which requires 1 week per year). If your policy provides less, you must supplement up to the statutory minimum.

Our company is filing for Chapter 11. Do we still owe NJ WARN severance?

Generally yes, though bankruptcy law adds complexity. NJ WARN severance claims by employees are likely priority claims in bankruptcy, meaning they are paid ahead of general unsecured creditors. The NJ WARN obligation does not disappear in bankruptcy. Consult bankruptcy and employment counsel before proceeding.

We are outsourcing our New Jersey operations to a third-party vendor. Does NJ WARN apply?

Possibly. NJ WARN covers "transfers of operations," which includes outsourcing arrangements where New Jersey employees lose their jobs because the work is moved to another entity. If the outsourcing causes 50 or more employees to be terminated at a single establishment, NJ WARN's notice and severance requirements likely apply.

Related resources

WARN Act: State-by-State Reference New Jersey WARN Act: quick reference California WARN Act guide New York WARN Act guide

This guide is provided for informational purposes only and does not constitute legal advice. Always verify with qualified employment counsel before a reduction in force.

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