A far-reaching bill that would be one of the biggest strikes against New Jersey employer rights in recent memory – even potentially landing a business owner in prison for making their own personnel decisions – is back on the front burner.
Bill S-2389/A-4682 was amended on the Senate floor on Feb. 27 and has the potential to be back on the legislative agenda this spring.
It requires employers to retain a wide range of service employees for 90 days after a change of ownership in their service contracts.
Even though there are already many worker protections for those who lose their jobs, the bill follows other recent laws signed by Gov. Phil Murphy mandating the retention of employees in both the hotel and healthcare industries.
“This bill is by far the most broad and troubling in terms of removing an employer’s rights to make their own business decisions,” said NJBIA Vice President of Government Affairs Alexis Bailey. “When we talk about New Jersey being overregulated and a very challenging place to do business, it is a mandate like this that unfortunately validates our reputation.
“Employee retention and seniority systems in private businesses should not be dictated by statute. Employers have always had, and should be able to maintain, the right of determining who they hire and retain as they see fit in order to make necessary operational decisions.”
IMPACTING MANY BUSINESSES
Under the legislation, the wide range of service workers who must be retained following a contract ownership change include any non-managerial or professional employee who works 16 hours or more per week in connection with the care or maintenance of a building or property.
This includes, but is 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, it includes food service workers.
Employers and facilities captured under this legislation include multi-family residential buildings with more than 50 units, commercial centers or office buildings that are more than 100,000 square feet, as well as primary, secondary and tertiary schools.
It includes 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.
“As I tell many employers – if you’re not aware of this bill, you should be because you’re probably impacted by it,” Bailey said.
“When you have this type of mandated employee retention, that even applies down to the minor contract change level, it may force businesses to maintain inadequate service for three months if a covered business entity decides to terminate a contract due to unsatisfactory work. This can also have health and safety implications for businesses and the public that purchase their products or services.”
“Additionally, even if a contract term is up and a covered business entity wants to enter a service contract with a new vendor for cost savings, efficiency, or any other reason, that new vendor will be automatically required to maintain the previous vendors employees. This legislation will present severe logistical challenges and unnecessarily interfere with the ability for businesses to enter into private contracts,” Bailey said.
Violating the provision of the bill, which is sponsored by Sens. Troy Singleton (D-7), Andrew Zwicker (D-16), Assemblymen Gary Schaer (D-36), Joe Danielsen (D-17) and Assemblywoman Britnee Timberlake (D-34), includes fines of up to $5,000 and imprisonment of up to 90 days.
“Imprisonment of any kind for a violation of an employer’s right to hire employees and freely enter into private service contracts as they see fit is extreme and beyond the pale,” Bailey said.
In addition to restricting an employer’s ability to make their own business decisions with their service contracts, Bailey said the bill also stands in direct conflict with at-will employment.
She said it may not pass legal muster because any successor employer would be bound to contract agreements they were not a part of by requiring them to assume the employees of the previous vendor during the 90-day period.
“The bill also doesn’t acknowledge that there are already safeguards in place to protect workers in the event they lose their jobs,” Bailey said. “They include collective bargaining, unemployment insurance and the federal and state mass layoff protections, of which New Jersey has some of the most stringent notice and severance pay requirements in the nation through the NJ WARN Act to protect workers.
“Additionally, employers already have the opportunity and often do freely choose to interview and hire the workers employed under previous contracts during the sale of a business if it would be the most advantageous for their business.
“We would impart to our lawmakers that this bill achieves no balance for employers who already have enough challenges in this state. We should not be taking away their fundamental rights to make business decisions,” Bailey said.