On August 18, 2022, Governor Murphy signed Senate Bill No.315 (S-315) into law, establishing broad employment protections for workers in the healthcare sector when there is a change in control of a healthcare entity employer. When S-315 takes effect on November 16, 2022, a change in control of the applicable entity will have to occur with a written agreement that preserves the wages, benefits, and employment status of eligible employees. Under the law, a “change in control” is broadly defined as any transaction that will alter substantially all of the assets used in a healthcare entity's operations, the controlling interest in the healthcare entity, or the identity of the healthcare entity employer.
Terms Defined Under S-315
Healthcare entities covered by S-315 are currently limited to healthcare facilities licensed pursuant to N.J.S.A. § 26:2H-1 et seq., regardless of size, and staffing registries or home care services agencies as defined under N.J.S.A. § 45:11-23. In larger facilities where component departments may qualify, only those specific departments are subject to S-315. A “former healthcare entity employer” is any employer of eligible employees who owns, controls, or operates a healthcare entity where the eligible employees are employed right before the change in control of the entity. A “successor healthcare entity employer” is the entity taking ownership, control, or operation of a healthcare entity with eligible employees.
Eligible employees are defined as any person employed at an affected healthcare entity during the ninety (90) day period immediately preceding a change in control of a healthcare entity, or who retains recall rights under an agreement with the former healthcare entity employer. Managerial employees do not qualify as “eligible employees.” In addition, any person who was discharged with cause during the 90-day period preceding the change in control do not qualify as “eligible employees.”
Requirements Under S-315
Former healthcare Entity Employers
Not less than thirty (30) days prior to a change in control taking effect, the former healthcare entity employers must:
Successor healthcare Entity Employers
Penalties and Sanctions
Violations of S-315 will generally be subject to the same sanctions and remedies provided under N.J.S.A. § 34:11-4.1 et seq. However, under S-315, failure to pay an employee wages, paid time off, or the value of benefits, as required under the law, will be regarded as a failure to pay the full amount of wages. Additionally, the discharge of an employee, or failure to offer employment or retain in employment an employee under S-315 will be regarded as retaliation against the employee. Finally, in civil actions brought by the employee, the court shall have authority to order injunctive or other permanent equitable relief, including, but not limited to, immediate reinstatement of any employee discharged or not retained in violation of this section.
With the exception of actions specifically prohibited under S-315, no action taken in compliance with a collective bargaining agreement entered into by an exclusive representative of employees of a healthcare entity subject to a change in control section shall be considered a violation of S-315. Similarly, no new duty imposed under S-315 shall be construed as limiting, delaying, or preventing the recognition of a collective bargaining representative of the employees by a successor healthcare entity employer, or collective bargaining between the successor healthcare entity employer and the collective bargaining representative.