New Jersey Severance Pay Laws (2026): When Severance Is Required

Yes, in one situation. New Jersey requires severance when an employer conducts a mass layoff, a termination of operations or a transfer of operations that ends 50 or more jobs within 30 days at a covered establishment. Under N.J.S.A. 34:21-2(b), part of the state's WARN law, each terminated employee receives one week of pay for each full year of employment, plus four more weeks if the employer gave less notice than the law requires.

Outside that situation, no New Jersey law requires severance. A firing, a small layoff or a layoff that does not meet the thresholds carries severance only if a contract, handbook, plan or union agreement promises it. For how other states handle severance and the full federal rules, see our severance pay laws by state guide.

Information last verified on October 8, 2026. This article has not been reviewed by a licensed lawyer.

Jurisdiction scope: This article covers New Jersey's Millville Dallas Airmotive Plant Job Loss Notification Act (N.J.S.A. 34:21-1 to 34:21-7), the state WARN law that sets mandatory severance and 90-day notice; New Jersey law on promised severance under the Wage Payment Law (N.J.S.A. 34:11-4.1 and 34:11-4.10); the state unemployment agency's treatment of severance; and N.J.S.A. 10:5-12.8 on nondisclosure terms, with short notes on the federal rules that apply in New Jersey. It does not cover when your last regular paycheck is due; see New Jersey final paycheck laws. It does not cover benefit amounts or how to file for unemployment; see New Jersey unemployment benefits.

Is severance required in New Jersey?

For a qualifying layoff or closing, yes. New Jersey's WARN law, the Millville Dallas Airmotive Plant Job Loss Notification Act (P.L.2007, c.212), was amended by P.L.2019, c.423, and the state says those changes took effect April 10, 2023. Since then the Act has required both 90 days of notice and severance pay for every employee whose job ends in a covered event.

Federal law has no severance requirement, so New Jersey's rule is the one that creates the payment. Federal WARN gives back pay only when an employer fails to give 60 days of notice (29 U.S.C. 2104); New Jersey's severance is owed whether or not notice was given.

Watch out: Older material, including the state's own employer handbook page, still describes WARN notice as 60 days, the federal period. That reflects the federal or pre-2023 rule. New Jersey's current text requires 90 days from covered employers (N.J.S.A. 34:21-2(a)).

Which layoffs and closings trigger New Jersey severance

The Act applies to an establishment: a place of employment the employer has operated for longer than three years, not including a temporary construction site. An establishment "may be a single location or a group of locations, including any facilities located in this State" (N.J.S.A. 34:21-1), so terminations at several New Jersey sites of the same employer can count toward the 50. Three events trigger it:

• Termination of operations. A termination of operations at the establishment that results in the termination of 50 or more employees within a continuous period of not more than 30 days.
• Transfer of operations. A transfer of the establishment's operations with the same result: 50 or more terminations within a continuous period of not more than 30 days.
• Mass layoff. A reduction that is not the result of a termination or transfer of operations and ends the employment of 50 or more employees at, or reporting to, the establishment in a 30-day period.

Terminations of two or more groups at one establishment within any 90-day period are added together unless the employer shows the causes are separate and distinct (N.J.S.A. 34:21-2).

What counts as a termination

Under N.J.S.A. 34:21-1, a termination of employment does not include a voluntary departure or retirement, a discharge or suspension for misconduct, a seasonal layoff, or an offer of the same or equivalent employment in New Jersey within 50 miles. A layoff counts as a termination when there is no commitment to reinstate you within six months. A layoff first announced as six months or less that runs longer is not a termination only if the extension was caused by business circumstances not reasonably foreseeable at the start and the employer gave notice once the extension became foreseeable.

The definitions of mass layoff and termination of operations also exclude events made necessary by a fire, flood, natural disaster, national emergency, act of war, civil disorder or industrial sabotage, decertification from Medicare or Medicaid, or revocation of a license under P.L.1971, c.136 (N.J.S.A. 34:21-1).

Who counts as the employer

The Act covers private employers: an employer is "an individual or private business entity which employs the workforce at an establishment" (N.J.S.A. 34:21-1). It also reaches beyond the company named on your paycheck. "Employer" includes persons who directly or indirectly own and operate the nominal employer, who own a subsidiary that does, or who make the decision responsible for the layoff or closing (N.J.S.A. 34:21-2(d)).

The 100-employee threshold

The 90-day notice duty in subsection (a) applies "in the case of an employer who employs 100 or more employees." Subsection (b), the severance duty, does not repeat that qualifier in its own words. The Department of Labor's notice form, NJES-997, describes severance as owed in the case of an employer that employs 100 or more employees. Whether the 100-employee figure limits the severance duty itself is a question of reading the statute, and we found no court decision on it.

New Jersey's business portal says part-time employees "now have the same protections under the law as full-time employees" and "should be counted as employees when determining an employer's WARN obligations." The statutory text we could open does not contain that language, so treat the part-time rule as the state's stated position rather than a rule we confirmed in the statute.

How much severance New Jersey requires

Section 34:21-2(b) states the duty:

"Provide to each employee whose employment is terminated severance pay equal to one week of pay for each full year of employment. If the employer provides any employee with less than the number of days of notification required pursuant to subsection a. of this section, the employer shall provide that employee with an additional four weeks of pay." (N.J.S.A. 34:21-2(b))

The details that set the amount:

The Act also does not limit any term of a collective bargaining agreement that is more favorable to employees (N.J.S.A. 34:21-4).

When the severance is earned

The statute says severance "shall be regarded as compensation due to an employee for back pay and losses associated with the termination of the employment relationship, and earned in full upon the termination of the employment relationship" (N.J.S.A. 34:21-2(b)). The text we reviewed does not set a separate deadline for paying it. Some secondary summaries say it must be paid with the final paycheck; we did not find that requirement in the statute, so we do not state it as law.

You cannot sign it away privately

"No waiver of the right to severance provided pursuant to this section shall be effective without approval of the waiver by the commissioner or a court of competent jurisdiction." (N.J.S.A. 34:21-2)

A separation agreement that asks you to release all claims does not, by itself, waive statutory WARN severance. Approval by the Commissioner of Labor and Workforce Development or a court is required.

New Jersey's 90-day notice rule

An employer with 100 or more employees must give notice at least 90 days before the first termination, or the period federal WARN requires if that is longer (N.J.S.A. 34:21-2(a)). The notice goes to:

• the Commissioner of Labor and Workforce Development;
• the chief elected official of the municipality where the establishment is located;
• each employee whose employment is to be terminated; and
• any collective bargaining units of those employees.

The notice must be in writing on the Commissioner's form and include the items listed in N.J.S.A. 34:21-3, among them the amount of severance pay payable and a statement about the state's response team. Employers file it with the Department's Rapid Response Team (P.O. Box 933, Trenton, NJ 08625-0933; 1-800-343-3919; RapidResponse@dol.nj.gov), according to form NJES-997.

Both laws can apply to the same layoff. Our severance pay laws by state guide covers the federal WARN Act in full.

How to enforce New Jersey WARN severance

The New Jersey Department of Labor and Workforce Development's WARN page says the Department "has neither enforcement authority, nor rulemaking authority" under the Act. Its role is to receive notices, provide the form and send its Rapid Response Team to affected workers.

Enforcement is private. An aggrieved employee or former employee, or a representative, may sue in Superior Court, individually or on behalf of others (N.J.S.A. 34:21-6). The court may award costs, including reasonable attorneys' fees, and compensatory damages including lost wages, benefits and other remuneration. Damages for lost wages "shall be limited to the amount of severance pay required pursuant to subsection b."

Section 34:21-6 does not state a deadline for filing suit, and we did not establish which limitations period a court applies to these claims. If you believe you were owed WARN severance, speak with a lawyer or legal aid office promptly rather than waiting.

Promised severance outside the WARN law

If your job ended without a covered layoff or closing, New Jersey severance comes only from a promise: an employment contract, offer letter, handbook policy, severance plan or union agreement.

Whether that promised severance counts as wages is unsettled. The Wage Payment Law defines wages as "direct monetary compensation for labor or services rendered by an employee, where the amount is determined on a time, task, piece, or commission basis," and excludes supplementary incentives and bonuses calculated independently of regular wages (N.J.S.A. 34:11-4.1(c)). We found no New Jersey case or agency statement deciding whether handbook or contract severance fits that definition.

The answer affects your remedies. For a valid wage claim, the Commissioner may take an assignment of the claim and sue, you may sue in Superior Court, and the court can award liquidated damages of up to 200 percent of the wages due plus costs and attorney's fees (N.J.S.A. 34:11-4.10(c)). If severance is not wages, a broken promise is pursued as a contract claim instead.

Severance and New Jersey unemployment benefits

New Jersey's unemployment agency separates two kinds of payment. Its FAQ says:

"Payments that do not extend employment include severance payments based on years of service with an employer. However, salary continuation through termination and payments in Lieu of Notice do extend employment." (New Jersey Division of Unemployment Insurance, general FAQ)

The agency advises filing right away even while you are receiving severance. An agent decides whether the payment affects your benefits, and an online claim may be scheduled for an appointment or fact-finding interview. Our New Jersey unemployment benefits page covers eligibility and amounts.

What a New Jersey severance agreement can and cannot require

Statutory WARN severance cannot be waived privately. As above, a waiver needs approval by the Commissioner or a court (N.J.S.A. 34:21-2).

Unemployment benefits cannot be waived. A release in a severance agreement cannot take away your right to unemployment benefits. Under N.J.S.A. 43:21-15(a), any agreement by an individual "to waive, release, or commute his rights to benefits or any other rights under this chapter shall be void," and no employer shall "require or accept any waiver of any right hereunder by any individual in his employ."

Discrimination, retaliation and harassment claims cannot be hidden. Under N.J.S.A. 10:5-12.8, a provision in an employment contract or settlement agreement that conceals the details of a discrimination, retaliation or harassment claim is "against public policy and unenforceable against a current or former employee." It also becomes unenforceable against the employer if the employee publicly reveals enough detail that the employer is reasonably identifiable. A settlement agreement resolving such a claim must include a bold, prominently placed notice of that rule. The section does not apply to non-competes or to agreements not to disclose proprietary information, which the statute limits to non-public trade secrets, business plan and customer information (N.J.S.A. 10:5-12.8(c)).

Releases of unpaid-wage claims. The Wage Payment Law says an employee's agreement to work for, or accept, less than the wages agreed or required by law "shall be no defense" to a wage action (N.J.S.A. 34:11-4.10(c)). By its words that addresses accepting less than owed wages; we found no New Jersey source deciding how it applies to a release in a severance agreement.

Non-compete terms in a severance agreement

N.J.S.A. 10:5-12.8(c) says its nondisclosure limits do not prohibit an employer from requiring an agreement not to compete "during or after employment," so that law does not void a non-compete in a severance agreement. Whether the clause is otherwise enforceable depends on New Jersey non-compete law, which this page does not cover.

Federal limits that also apply

These federal rules apply in New Jersey; our severance pay laws guide explains each:

• Workers 40 and older. A release of federal age-discrimination claims must give you at least 21 days to consider it (45 days in a group layoff) and 7 days to revoke it after signing (29 U.S.C. 626(f)).
• Sexual harassment and assault. Under the Speak Out Act, a nondisclosure or non-disparagement clause agreed to before such a dispute arises cannot be enforced in court when the conduct is alleged to violate federal, tribal or state law (42 U.S.C. 19403). The Act preserves state laws that protect employees at least as much.
• Labor-law rights. The NLRB's McLaren Macomb decision, 372 NLRB No. 58 (2023), bars severance agreements that require employees to broadly give up their National Labor Relations Act rights. The NLRB's General Counsel is arguing to overrule it in Valley Radiology, P.A. (10-CA-324512), an open case, so the decision remains Board law until the Board acts.

Reading a New Jersey severance offer

If your job ended in a layoff or closing, first ask whether it was a covered event: 50 or more terminations within 30 days at an establishment (which can include all of the employer's New Jersey locations) operated for more than three years. If it was, check that the offer at least matches one week per full year at the higher of your three-year average or final regular rate, plus four weeks if you got less than 90 days of notice, and remember that a private release alone does not waive that amount. Our severance pay laws guide has general guidance on reading and negotiating an offer.

Recent New Jersey changes

We could not reach the New Jersey Legislature's website to confirm the enactment history on its bill pages, and we could not check whether any 2024 to 2026 bill amends the WARN law or N.J.S.A. 10:5-12.8. The statute text on this page comes from the Department of Labor's posted copy of the Act. Check the Legislature's bill pages before relying on the absence of a later change.

Related

• Severance pay laws by state
• New Jersey final paycheck laws
• New Jersey unemployment benefits
• New Jersey at-will employment laws

Disclaimer: This article provides general legal information about New Jersey severance pay law (the Millville Dallas Airmotive Plant Job Loss Notification Act, N.J.S.A. 34:21-1 to 34:21-7, the Wage Payment Law and N.J.S.A. 10:5-12.8) and the federal laws that apply in New Jersey. It is not legal advice. The information was verified on October 8, 2026. For advice about your situation, contact the New Jersey Department of Labor and Workforce Development, a legal aid office or a lawyer licensed in New Jersey.

Last updated: October 8, 2026.

Frequently Asked Questions

Is severance pay required by law in New Jersey?

Only after a covered mass layoff, termination of operations or transfer of operations that ends 50 or more jobs within 30 days at a covered establishment. Then N.J.S.A. 34:21-2(b) requires one week of pay for each full year of employment. Other layoffs and firings carry severance only if a contract or policy promises it.

How much severance does New Jersey require?

One week of pay for each full year of employment, at the higher of your three-year average regular rate or your final regular rate, plus four more weeks if the employer gave less notice than required (N.J.S.A. 34:21-2(b)).

How much notice does New Jersey require before a mass layoff?

An employer with 100 or more employees must give at least 90 days of notice, or the federal WARN period if longer, before the first termination (N.J.S.A. 34:21-2(a)). The federal WARN Act requires 60 days (29 U.S.C. 2102(a)).

Can I waive New Jersey WARN severance by signing a release?

A private release alone does not do it. N.J.S.A. 34:21-2 says no waiver of the right to statutory severance is effective without approval by the Commissioner of Labor and Workforce Development or a court.

Who enforces New Jersey WARN severance?

You do, through a lawsuit in Superior Court, individually or on behalf of others (N.J.S.A. 34:21-6). The New Jersey Department of Labor says it has neither enforcement nor rulemaking authority under the Act.

Do part-time employees get New Jersey WARN severance?

New Jersey's business portal says part-time employees now have the same protections as full-time employees under the law and should be counted when determining an employer's WARN obligations. We could not locate the statutory text for that rule, so confirm it before relying on it.

Does severance affect unemployment in New Jersey?

The state's unemployment FAQ says severance based on years of service does not extend employment, but salary continuation and pay in lieu of notice do. It advises filing right away; an agent decides whether your severance affects benefits.

When must New Jersey WARN severance be paid?

The statute says it is earned in full when the employment relationship ends (N.J.S.A. 34:21-2(b)). The text we reviewed does not set a separate payment deadline.

How long do I have to sign a severance agreement in New Jersey?

We found no New Jersey statute setting a review or revocation period for private severance agreements. If you are 40 or older, federal law gives you at least 21 days to consider a release of age claims, 45 in a group layoff, and 7 days to revoke (29 U.S.C. 626(f)).