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 at the terms of their previous employer 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 a series of similar troubling bills mandating the retention of employees that have been signed into law in New Jersey. 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. The Legislature must not continue this trend of striking at-will employment and collective bargaining through statute. Legislation such as this usurps managerial decision making, harming our competitiveness and increasing the cost of doing business 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.
There is no need for this broad legislation. There are already mechanisms in place such as collective bargaining and the WARN Act to protect employees during a change of service contract. All employees are also eligible for unemployment benefits in the event of a layoff. Additionally, service contract vendors already have the opportunity and often do freely choose to interview and hire the employees hired under previous contracts if it would be the most advantageous for their business.
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 for 90 days.
In addition to this egregious mandate, this legislation would criminalize members of the business community if they violate the provisions of this law. This bill allows successor employers to be subject to fines or imprisonment of up to 90 days for violations of the law. This criminalization of employers is an unnecessary and unfair overreach.
This legislation is the most broad and troubling iteration of employee retention to date. This trend adds to New Jersey’s reputation of being overly regulated and an unfriendly place to do business. We urge the legislature to reject S-2389. 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.