Another Mandate to Hamstring Businesses

A business’s workforce is crucial for its success. That is why hiring decisions are not choices employers take lightly. Unfortunately, the ability to freely make hiring decisions is increasingly under attack in New Jersey.

Over the past two years, the state Legislature has passed far-reaching legislation mandating employee retention in certain industries. In 2021, Gov. Phil Murphy signed a law mandating hotel employees be retained for 90 days following the transfer of ownership of a hotel business. A few months later, he signed another law mandating 90-day retention of employees after a change of ownership of healthcare entities.

Now the Legislature has introduced its most extreme iteration of these unnecessary employee retention mandates to date. This legislation would require a wide range of service employees at employer sites in virtually every sector of our economy to be retained for 90 days following any change in service contract ownership. This retention mandate would be triggered not only by the sale of a business, but also minor changes in service contracts including changing vendors or terminating a service contract to hire employees in-house.

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 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.

This legislation would impact service employees working in multifamily residential buildings with more than 50 units, commercial or office buildings over 100,000 square feet, schools, 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.

In addition to the far-reaching retention mandate, the legislation includes egregious penalties for violations of the law that could lead to employers facing criminal liability.

If passed, this bill will limit the ability of employers to make necessary operational decisions. 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. NJBIA will continue to advocate in opposition to this legislation to ensure we avoid yet another unnecessary labor mandate that will hamstring business decision-making.

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