Cleaning House: New Jersey Enacts Building Service Worker Retention Law

On July 24, 2023, Governor Phil Murphy signed into law Assembly Bill 4682/Senate Bill 2389 protecting non-managerial and non-professional service workers, who work at eligible locations, from sudden and unexpected loss of employment due to changes in ownership. New Jersey’s new law is the second of its kind in the United States.

Service Worker Defined

Under the new law, service employees are defined as non-managerial or non-professional employees who have been working on a full-time or part-time basis for at least 60 days and are regularly scheduled to work at least 16 hours per week. These service workers must work in connection with the following: (1) the care or maintenance of a building or property; (2) passenger related security services, cargo related and ramp services, in-terminal and passenger handling, and cleaning services at an airport; or (3) food preparation services at a primary or secondary school, or at a tertiary educational institution.

Eligible Locations

The law applies to locations such as multi-family residential buildings with more than 50 units; large commercial centers and office buildings with more than 100,000 square feet; schools; cultural centers; industrial sites or pharmaceutical labs; airports and train stations; certain hospitals, certain nursing care facilities, certain senior care centers or other health care provider locations; State court; or a warehouses or distribution centers.

Protections

Before change in ownership, a current employer must: (1) give 15-day notice to employees and their collective bargaining representative; (2) post a notification at the job site about the change in property ownership; (3) provide the name of the new employer; and (3) provide the new employer with current employee information.

The new employer is required to keep the service worker employed for 60 days or until its service contract is terminated, whichever is earlier. In addition, the new employer may not reduce the service worker’s hours to circumvent the law. However, the new employer can retain less than all the service employees if: (1) fewer service workers are required to perform the work; (2) the new employer retains service workers by seniority; (3) maintains a preferential hiring list of those employees not retained; and (4) hires any additional service employees from the list, in order of seniority until all affected service employees have been offered employment. However, the law does not apply to the new employer if they agree to assume the collective bargaining agreement (CBA) on or before the termination of the service contract, so long as the CBA includes terms and conditions for the discharge or laying off employees.

An employee who has been fired in violation of the law may bring an action in court against the new employer. For the first violation, a fine may be imposed not exceeding $2,500 and, for second and subsequent violations, a fine not exceeding $5,000. The court may also order restitution and injunctive relief.

The Bottom Line

An employer is free to sell their business, however, the new employer will be bound to certain restrictions that protect current employees. If the new employer disregards the above and violates the law, they may be subject to punishment if the employee chooses to exercise their rights.

For more information regarding this legislation and how it impacts your business, please contact Harris S. Freier, Esq., Partner in the firm’s Employment Law & Litigation Practice Group via email here or Dina M. Mastellone, Esq., Chair of the firm’s Human Resources, Counseling & Compliance Practice Group via email here, or call 973-533-0777.