New Mandatory Severance Requirements and
Earned Sick Leave Regulations
New Jersey is now the first state in the country to require mandatory severance pay for some layoffs.
Expansive amendments broadening the scope of the Millville Dallas Airmotive Plant Job Loss Notification Act, New Jersey’s mini-WARN Act (NJ WARN Act) are set to t ake effect on July 19, 2020.

  • Companies employing at least 100 employees who are planning a large layoff, plant closing, or transfer that would put at least 50 employees, including part-time employees, out of work will be required to provide advance notice of at least 90 days, up from a previous requirement of 60 days, and will be required to provide those impacted workers with a mandatory severance of one week’s pay for every year of service with the company.

  • If the company does not provide 90 days’ notice, they would be required to pay an additional four weeks’ severance. 
The New Jersey Department of Labor and Workforce Development has released final regulations for the state’s Earned Sick Leave Law (“ESLL”), which went into effect in October 2018. 
These regulations provide clarity and additional guidance for New Jersey employers. Some notable changes and clarifications include:

  • Employers may now use an employee’s anniversary year as the benefits year for sick leave purposes. Previously all employees were required to be kept on the same benefit year. 

  • Employers who have opted for combined PTO policies, rather than separate sick leave and vacation policies should revisit their policies to ensure compliance. Pursuant to the new guidance, PTO policies must:
  • Allow an employee to use all of their allotted PTO for the reasons allowable under ESLL;
  • Either accrue or advance PTO days, as allowed under ESLL;
  • Allow for use of PTO in accordance with ESLL;
  • Provide payment in line with the ESLL; and
  • Comply with the ESLL carryover or payout requirements. 

  • An employer may not require an employee to exhaust all of their available paid sick leave prior to using unpaid leave under the Family and Medical Leave Act (“FMLA”). 

  • Consistent with New Jersey’s Wage Payment Law, a failure to pay earned sick leave to employees will be considered a failure to pay wages and will subject employers to penalties. This also applies to employers who opt for an end of year payout, rather than a carryover, of earned sick leave.

  • Employees are able to use earned sick leave for non-educational school events, including plays, sports games, recitals, or other extra-curricular events which a parent or guardian is invited to. 
QUESTIONS? If you have any questions regarding compliance with NJ's ESLL, the State's new severance pay requirements, or any other employment law related questions, please contact:

Heather Adelman, Esq. | 973.467.1325

Maralee Sanders, Esq. | 973.467.1325
This publication/newsletter is for informational purposes only and does not contain or convey legal advice regarding any specific situation. This material may also be considered attorney advertising under court rules of certain jurisdictions.