The new law impacts changes in administrative transactions between New Jersey medical institutions. McCarter & English, LLP


New Jersey health care facilities and home care services that are considering a change of control are subject to the requirements of Senate Bill 315 (Act), signed into law by Governor Phil Murphy on August 18, 2022 and taking effect in November. should be immediately noted. June 16, 2022. This law provides employment security for non-managerial employees that continues after the change of control is complete. The law is available here.

Entities covered by this law include medical facilities licensed pursuant to NJSA 26:2H-1. Less than.Recruitment Registers and Home Care Service Agencies, as defined in NJSA 45:11-23.

The law applies to a “change of control” of a covered healthcare entity. This is defined as including the sale, assignment, transfer, donation, or other disposition of all or substantially all of the assets used to operate a healthcare entity. of control of a healthcare entity, such as by consolidation, merger or reorganization; This law also applies to any event or series of events that change the employer identity of a covered healthcare provider, including the purchase, sale, or termination of a management contract or lease. A change of control does not include transactions between New Jersey government agencies.

Employees eligible for protection under this law include employees who were hired during the 90 days prior to the effective date of the change of control and previously terminated employees who have agreed recall rights. includes members. Employees and managerial employees (defined as employees who are exempt from overtime under the New Jersey Wages and Hours Act Officers Exemption) who are terminated for cause during the 90-day period are subject to this provision. not protected by law.

The law requires any covered healthcare provider considering a change of control to take the following actions at least 30 days prior to the effective date:

  • Inform qualified employees of their legal rights.
  • Post a summary of eligible employee rights in a conspicuous place in the workplace.
  • Provide the applicable collective bargaining representatives and successors with a list of each covered employee’s name, address, hire date, telephone number, wage rate and employment category.

These requirements may allow employees and unions to interfere with confidential or sensitive transactions. The law imposes the following requirements on the succeeding entity following a change of control: This should also be stated in the contract between the previous employer and the successor entity.

  • The successor entity will provide non-managerial employees with the same total base pay, paid vacation, and health benefits they received prior to the change of control for a four-month “transition period.” must be provided in writing. Nursing Care, Retirement, and Education Benefits. Employment offers must remain open for at least 10 business days.
  • During the transition period, the successor company will provide eligible employees who previously held positions with the previous employer until available employment positions are filled or until no eligible employees are available. All available employment positions must be offered.
  • If at any time during the transition period the total number of employment positions is less than the total number of eligible employees, the selection of employees to be hired shall be based on seniority and experience.
  • Employees who are eligible to accept employment may only be terminated for cause during a transition period or as part of a workforce reduction (depending on seniority and experience).
  • At the end of the transition period, the succeeding company must prepare a written performance evaluation for each eligible employee retained and if the employee’s performance during the transition period was “satisfactory”, the successor company will Employment must be provided. The law does not define satisfactory performance.
  • The successor entity must retain a written record of each offer of employment and each evaluation made for at least three years from the date of the offer or evaluation, and make available upon request of the employee or employee representative. I have. Each record must include a name. , address, date of hire, telephone number, wage rate, employment category of the employee.

This law does not apply to actions taken pursuant to collective bargaining agreements entered into by exclusive representatives of employees of medical institutions. Furthermore, the Act does not preclude recognition of collective bargaining representatives during the transition period or actual collective bargaining with successors.

Affected employees can seek redress from the New Jersey Department of Labor and Workforce Development or sue both their former and successor employers for violations. The law incorporates cumbersome remedies available to employees under the New Jersey Wages Payment Act, NJSA 34:11-4.1. Less than., for wage violations, including full unpaid wages, paid vacation, and restoration of benefits values. Up to 200% damages. and attorney fees. Improperly dismissing, hiring or failing to hire an employee in violation of the law constitutes retaliation. A court may order injunctive and other equitable relief for violations of this Act. This includes returning to work.

One of the effects of this new law in a unionized situation is that the successor organization inherits the union bargaining obligations that the previous organization had, and bargaining with that union begins on the terms of the previous organization’s collective bargaining agreement. is to guarantee that

New Jersey health care organizations considering changing controls should note that the law meets the requirements of the Federal Workers Adjustment and Retraining Notice Act of 1998 (WARN) and its New Jersey counterpart, Millville Dallas Airmotive Plant Job Loss. You also need to consider how it overlaps and interacts with Notice Act (commonly known as the New Jersey WARN Act). A proposed amendment to the New Jersey WARN Act, which was due to take effect on July 19, 2020, was put on hold by Governor Murphy’s Executive Order No. 103 related to the pandemic. This amendment will take effect 90 days after the state of emergency declared by Executive Order 103 is lifted. Previous alerts regarding fixes can be found here.

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