State Watch

New Jersey becomes first state to guarantee severance pay for mass layoffs

New Jersey Gov. Phil Murphy (D) signed legislation Tuesday that would make his state the first in the country to guarantee severance pay for mass layoffs. 

The bill requires companies with 100 or more full-time employees to pay them a week’s pay for each year of service during a mass layoff, plant closing or transfer resulting in 50 or more workers losing their jobs. It also increases the minimum number of days notice from 60 to 90 for such events.

The bill was introduced in 2018 after Toys R Us closed its doors, costing 2,000 New Jersey residents their jobs. Private equity firms that owned the toy retailer eventually provided severances for the employees.  

“When these corporate takeover artists plunge the companies into bankruptcy, they walk away with windfall profits and pay top executives huge bonuses, but the little guys get screwed,” said state Sen. Joe Cryan (D), who co-sponsored the bill, according to The Associated Press

Critics of the bill say that it, along with the state’s phasing toward a $15 minimum wage, could deter business from coming to the state.

The bill passed the Democratic-controlled state legislature largely along party lines, with Democrats in favor and Republicans opposed. The law goes into effect in July.

Tags labor law New Jersey Toys R Us

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