Severance Pay For Mass Layoffs

General counsel in New Jersey should be aware that Senate Bill 3170, which was postponed for three years due to the economic effects of the pandemic, took effect on April 10, 2023. It requires businesses with more than 100 employees that lay off more than 50 of them to pay severance. This is the first such law in the country. It was motivated by Toys “R” Us closing down abruptly, causing more than 30,000 workers nationwide – roughly of them 2,000 in New Jersey – to lose their jobs with little or no severance pay or benefits. Employers covered under the law must offer workers severance equal to one week’s pay for each year of service. They must also provide at least 90 days’ enhanced notice of layoffs. A violation of that requirement obligates the offender to an additional four weeks of severance pay. Bennet Pine and Joshua Zelen, attorneys with Anderson Kill, tell affected companies to update their policies and evaluate their financial situation in view of the new law.