By: Cristina N. Hyde, JD

On August 18, 2022, Governor Phil Murphy signed the Healthcare Facility Successorship Bill (the “Bill”) into law.  The new law (P.L.2022, C.101) takes effect in mid-November.  Applicable to all sales, transfers and any other arrangements that affect the control of a healthcare entity after the effective date, it’s purpose is to prevent staff from unfairly enduring pay cuts or losing their jobs when ownership of their workplace is in transition.

Specifically, the Bill provides certain protections to employees concerning wages, benefits and employment which include:

• The requirement that all eligible employees be offered employment during a transitional period of not less than four months following a change in control, with no reduction of wages, paid time off, or the total value of benefits.
• The requirement that during the transitional period, all available employment positions shall be offered to eligible employees who have previously held those positions until said positions are filled or until no more eligible employees are available.
• The requirement that, in the event of a reduction in force during the transition period, available positions shall be offered to eligible employees based on seniority and that laid off employees be offered any positions previously held should those positions be subsequently restored during the transitional period.
• The requirement that employees be given written evaluations of their work during the transitional period and retained if their work is satisfactory.
• The requirement that, at least 30-days prior to a change in control, employees are notified of their rights pursuant to the Bill and that a notice containing those right is posted in a conspicuous location accessible to all employees.

In addition, the Bill contains penalties for employers who are found to be noncompliant and protections for actions taken pursuant to collective bargaining agreements.

If you have any questions about New Jersey’s Healthcare Facility Successorship Bill, its effect on your healthcare facility, or what steps your administrators should take to ensure compliance, Contact Us.