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NJBIA is opposing a bill today that would place unfair conditions on the transfer of ownership of healthcare facilities in the state.

Bill S-315, which was released by the Senate Health, Human Services and Senior Citizens Committee, mandates that all non-managerial employers be maintained by the purchasing owner of the facility – unless a reduction in staff is needed.

However, with that provision comes a requirement that the new owner hire back employees based on seniority under the previous owner, with no end date to offer that employment.

NJBIA Chief Government Affairs Officer Chrissy Buteas explained in testimony today that the law currently provides employee protection through collective bargaining.

“This bill, however, changes the rules of the game and forces a new owner to accept workers employed under the seller, whether they’re unionized or at-will employees,” Buteas said. “The new owner also must accept wage and benefit terms negotiated by the former owner.

“By requiring that future employee layoffs be based on a seniority system, you would be removing the necessary flexibility to maintain the best staff, ensuring that a business can prosper. No for profit or nonprofit business should be forced to accept those conditions on their management.”

In her testimony, Buteas said the legislative mandate would have serious unintended consequences for the healthcare industry, including the closure of facilities that would impact the marketplace.

“Essential healthcare facilities may be forced to close because the current owners cannot keep them open and potential purchasers may be dissuaded by the conditions being imposed by this bill,” Buteas said. “During a pandemic, when these facilities are more essential than ever and struggling to survive, is not the time to make it even more difficult for them to remain open.

“Further, given the continued consolidation in the healthcare industry, this bill can have a devastating effect on the market, forcing certain facilities to close.  This may be particularly problematic in our urban areas, where healthcare facilities have struggled to remain open.”

Buteas also noted that the bill, if enacted, would particularly impact small businesses, as there is no employee threshold written into the bill. It would also remove needed confidentiality around the sale of a healthcare business.

To read Buteas’ full testimony, click here.