New Jersey Enacts Series of Worker-Friendly Laws: Increases Burdens and Penalties on Employers for Misclassifying Employees

Employment Law Insider Alert

PUBLISHED ON: February 3, 2020

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On January 21, 2020, New Jersey Gov. Phil Murphy signed a series of laws that are decidedly pro-employee. The laws stiffen penalties on employers for misclassifying individuals as independent contractors;require businesses to pay severance to workers affected by mass layoffs; impose joint liability on businesses and managers; and provide for new notice posting requirements. The laws follow a blueprint for pro-employee legislation established in liberal states like New York and California.

The new laws are summarized as follows:

Severance Pay for Workers Facing Plant Closings or Mass Layoffs Senate Bill 3170:

Businesses with 100 or more full-time employees must pay their workers one week of severance pay for each year of service when there is a downsizing or plant closure affecting 50 or more employees. Employers also will be required to provide workers with at least 90 days’ advance notice of such actions, increased from 60 days’ notice under the federal WARN (Worker Adjustment and Retraining Notification) Act.

If businesses fail to provide the 90-day advance notice, they will be required to provide workers with an additional four weeks of severance pay. The sponsors of this legislation made it clear that the law was motivated by employers like Toys R Us that declared bankruptcy and closed stores and other facilities suddenly, leaving thousands of New Jersey employees without severance pay or employee benefits.

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