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On behalf of our member companies that make NJBIA the largest, most impactful statewide business association in the nation, I write to you in opposition to Senate Bill No. 2389 (Singleton/Zwicker), which would require a vast number of covered employers to retain a wide range of service employees for 90 days following a change in contract ownership. If enacted, this legislation would place an unwarranted mandate on business and stifle its ability to make necessary operational decisions.   


This legislation follows the recent enactment of a series of similar troubling laws mandating the retention of employees.  In January, Governor Murphy signed P.L. 2021 c.496 into law which mandates the retention of hotel employees following a transfer of ownership. In August, he signed P.L. 2022 c.101 into law mandating employee retention in healthcare entities. The current bill is the most far-reaching employee retention bill to date because it impacts so many types of employers and goes beyond mandating retention of employees during the sale of an entire business, but also the change of a minor service contract. The Legislature must not continue this trend of striking at-will employment and mandating collective bargaining through statute. Legislation such as this usurps managerial decision making, increasing the regulatory burden of doing business and harming our overall competitiveness in New Jersey.   


This legislation so broadly defines service employees and covered locations to impact a large majority of businesses in our state.  Employers and facilities captured under this legislation include multi-family residential buildings with more than 50 units, commercial or office buildings that are more than 100,000 square feet, primary, secondary and tertiary schools, as well as cultural centers such as museums, convention centers, arenas, performance halls, industrial sites, pharmaceutical labs, airports, train stations, hospitals, nursing care facilities, senior care centers and other healthcare provider locations, state courts and warehouse and distribution centers.  


Under the legislation, service employees include any non-managerial or professional employee who works 16 or more hours per week in connection with the care or maintenance of a building or property. These types of employees include, but are not limited to, security, front desk, maintenance, grounds maintenance, stationary fireman, elevator operators, window cleaners and janitorial service staff. At airports, it includes passenger-related security services, cargo related and ramp services, in-terminal and passenger handling and cleaning services.  In schools, the bill includes food service workers. These broad definitions make the impact of this mandate so expansive that it will unnecessarily impact employers in large swaths of the state economy. 


There is no need for this broad legislation. There are already safeguards in place to protect workers in the event that they lose their job such as collective bargaining, unemployment insurance and the state and federal mass layoff protections that can protect employees during a change of service contract if they are not offered employment by a new contractor. Additionally, service contract vendors already have the opportunity and often do freely choose to interview and hire the workers employed under previous contracts if it would be the most advantageous for their business.  


Employers should have the choice to hire who they see fit based on financial need, job performance, experience or other factors in order to make sound business decisions. This legislation may not pass legal muster as the bill would make successor employers bound to contract agreements that they did not agree to by requiring them to assume the employees of a former vendor during the 90-day period. 


This legislation is the most broad and troubling iteration of employee retention mandates to date. This unsettling trend adds to New Jersey’s reputation of being overly regulated and an unfriendly place to do business. The Legislature must seriously consider the need for these mandates and the harmful message they send to the business community. Employee retention and seniority systems in private businesses should not be dictated by statute. Employers have a right to determine who they hire and retain as they see fit in order to make necessary operational decisions.  


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