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New law surrounding severance pay is looking to take effect in 90 days

By Thomas McKinney
Partner

Governor Phil Murphy previously signed a law back in January 2020 that requires employers to give severance pay to workers who were let go due to many layoffs. This law was supposed to be set in 2020 but due to the coronavirus pandemic, it was put on hold. Looking beyond that, Gov. Murphy is ordering the new law to be enacted in 90 days. Examining the law more closely, it states that businesses with 100 or more employees must pay a severance of one week for each year of work in the event of a large layoff or a plant closing or transfer that will put at least 50 people out of a job.

Along with that, businesses are also mandated to notify employees of a mass layoff within 60 days of doing so. The main advocacy for this law came from Toys “R” Us shutting down which led to more than 30,000 employees being out of jobs across the United States and about 2,000 being jobless in New Jersey. This new law did come with some criticism from the NJ Business and Industry Association which believe that companies will steer clear of locating in New Jersey with this new law set to take place. 

About the Author
Tom McKinney is an experienced NJ Employment Lawyer in all major areas of labor and employment law, including discrimination, harassment, overtime violations, wage and hour claims, sexual harassment, wrongful discharge, Title VII, ADA, ADEA, FMLA, LAD, FLSA, and all other employment law claims. Tom is admitted to practice in the States of New Jersey and New York, United States District Court for the Eastern District of New York, Southern District of New York, District of New Jersey, and United States Court of Appeals for the Third Circuit. Prior to forming the firm, Tom practiced at Gibbons P.C. in Newark, NJ. If you have any questions regarding this article, contact Tom here today.