By: Jennifer Weitz, Esq. and Ty Hyderally, Esq.

The coronavirus pandemic prompted a (perhaps newfound) awareness of and appreciation for the people employed by the healthcare industry. Now, New Jersey has moved to strengthen job protections for these workers.

Last month, Governor Murphy signed into legislation Senate Bill 315, ensuring security for those workers in the healthcare sector who experience a change in the control of their health care entity employer. The bill requires that any change in control of a health care entity be made by a contract or agreement which provides certain protections for employees regarding their wages, benefits, and employment in connection with the change in control.

“Change of control” refers to sales, transfers of ownership, consolidations, mergers, reorganizations, and any other arrangement that changes the control of a health care entity. Excluded from the law is any change in which both the former health care entity employer and the successor health care employer are government entities.

Under the new law, non-governmental health care entities must offer continued employment to all eligible employees for at least four months following the transfer of control, without any reduction in wages, paid time off, or the total value of their benefits – including health care, retirement, and education benefits. All available jobs must be offered in writing to current employees who previously held that position, until all positions are filled or there are no more eligible employees available. The change in control is defined as occurring on the date of execution of the document effectuating the change.

Employees who are retained pursuant to the new law may not be let go during the four-month transitional period, unless the successor employer downsizes the total number of positions. In that case, priority must be given to employees based on seniority and experience. At the end of the transitional period, the employer must conduct a written performance evaluation of each employee retained during the transitional period and offer to keep them on board if that employee’s performance was satisfactory.

At the same time, any action taken by a representative of affected employees pursuant to a collective bargaining agreement will not be considered a violation of the bill. Similarly, the bill does not limit, delay, or prevent the recognition of an employee collective bargaining representative, or any collective bargaining between the successor health care entity employer and the representative.

Any employer found to be in violation of the bill will be subject to the sanctions provided for in New Jersey’s Wage and Hour Law, N.J.S.A. 34:11-4.1 et seq. As well, the bill specifies that the discharge of an employee, or a failure to offer employment or retain an affected employee, will be considered retaliation. The bill also provides a private cause of action, so that an affected employee may bring a civil action, and a court may order injunctive or other permanent relief, including reinstatement.

According to investment and tax advisory firm KPMG, the remainder of 2022 is expected to bring a rise in hospital consolidation, restructuring, closures and bankruptcies.[1] The new bill will be an important source of protection for healthcare workers amidst these industry trends.

En nuestra firma hablamos español. This blog is for informational purposes only.  It does not constitute legal advice, and may not reasonably be relied upon as such.  If you face a legal issue, you should consult a qualified attorney for independent legal advice with regard to your particular set of facts.  This blog may constitute attorney advertising.  This blog is not intended to communicate with anyone in a state or other jurisdiction where such a blog may fail to comply with all laws and ethical rules of that state of jurisdiction.

[1] https://advisory.kpmg.us/blog/2022/hospital-health-system-prognosis.html