NJ Health Care Workers Get More Job Protections With New Law

NEW JERSEY, NJ — Health care is a big industry in New Jersey. And when the ownership of a hospital or nursing home changes, it shouldn’t mean that its doctors, nurses and other staff face pay cuts or lose their jobs. Now – for at least four months after their workplace is sold – these workers won’t have to worry, advocates say.

On Thursday, Gov. Phil Murphy signed S-315/A-3684 into law. The bill takes effect in 90 days, and will create “employment protections for workers in the health care sector when there is a change in control of their health care entity employer.” Read More: NJ Bill Would Protect Pay, Benefits During Health Care Mergers

Supporters of the law say it will give crucial protections for non-managerial health care workers. But critics say it places a huge burden on hospitals and other health care providers – and may even result in some closing their doors.

Here’s what the legislation does, according to a statement from the governor’s office:

“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.”

Murphy’s office added:

“Employees who are retained as a result of this policy may not be let go during the four-month transitional period, unless the successor employer downsizes the total number of positions – in which 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 they retained during the transitional period and offer to keep them on board if that employee’s performance was satisfactory. These rules apply to sales, transfers, and other arrangements that change the control of a health care entity, including consolidations, mergers, and reorganizations. Employers found in violation of these requirements will be subject to penalties for noncompliance.”

Murphy said the new law is a win not just for health care workers, but also for their patients, who have come to rely on them as professionals they know and trust.

“New Jersey is a state that both values the contributions of our health care workers and stands by the right of all workers to fair wages and employment practices,” the governor said. “With this law, we will eliminate the uncertainty many health care workers face during transfers of ownership by implementing the wage, benefit and employment protections these dedicated employees deserve.”

Sen. Joe Vitale (D-19) and Sen. Richard Codey (D-27), who sponsored the bill in the Senate, both cheered its signing on Thursday.

“Our front-line workers in the health care industry risked their lives to provide care to sick – and in some cases, dying – patients during the height of the coronavirus pandemic,” Codey said. “Those same workers have a right to expect their wages and benefits are going to be protected, and be insulated from any structural change that might come from the consolidation of health care entities.”

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“We owe them our undying gratitude, certainly, but we also must honor their commitment by ensuring they are treated humanely and fairly as employees,” Vitale agreed. “This legislation will make sure of that, and make sure their wages and benefits are protected, regardless of the volatility in and around the health care industry.”

Assemblyman Wayne DeAngelo (D-14) also praised the bill’s signing.

“We must honor collective bargaining agreements and ensure the workers of new jersey are always treated fairly,” DeAngelo said. “This law will ensure workers’ rights are protected through company takeovers and transfers of ownership.”

Not everyone is happy about the new law, however.

The New Jersey Business and Industry Association (NJBIA) released a statement that panned the legislation after its signing on Thursday.

“While the intent of this bill is to protect workers who already have protections, it once again strikes no balance for the concerns of the business and health care community and may, in fact, result in unintended consequences, like the closure of facilities,” President and CEO Michele Siekerka said.

Siekerka continued:

“This law now effectively forces a new owner to accept workers employed under the seller, whether they’re unionized or at-will employees. The new owner must accept wage and benefit terms negotiated by the former owner. By requiring future employee layoffs be based on a seniority system, as this law does, a new owner no longer has the flexibility to maintain the best staff, which gives any business their best chance to succeed. With the continued consolidation in the health care industry, this law will likely have a negative effect on the market, forcing certain facilities to close. This may be particularly problematic in our urban areas, where health care facilities have struggled to remain open.”

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