A new law touts job protections for New Jersey healthcare workers when facility ownership changes hands. But the state’s aging service organizations say the “unprecedented restrictions” contained in the law could actually lead to unnecessary job losses.
SB 315which took effect last week, now requires contracts for the sale of certain health care entities – including assisted living communities – in order to preserve employee wages and benefits and respect collective agreements.
The law requires new employers to offer eligible employees — those employed 90 days before any change in ownership — continuous employment for at least four months. Employers also cannot reduce wages and benefits during this time, including paid vacation, health care, retirement, and education benefits. The requirements do not extend to managers or executives.
These rules apply to sales, transfers, and other agreements that change control of a healthcare entity, including consolidations, mergers, and reorganizations.
The law covers all non-governmental health care entities, including hospitals, rehabilitation centers, long-term care facilities, retirement homes, residential health care facilities and other health care facilities . It also covers home health agencies, as well as assisted living residences and programs, and comprehensive personal care homes.
Kathy Fiery, vice president of assisted living for the Health Care Association of New Jersey, said the new law imposes “unprecedented restrictions” on the sale or transfer of healthcare facilities, including assisted living facilities. .
“We opposed the law because it restricts a buyer’s normal managerial discretion that may be needed to remedy poor financial conditions that may have necessitated the sale,” Fiery said. McKnight Seniors Residence. “Without this discretion, a potential buyer may choose not to purchase a facility, making the closure of financially distressed facilities more likely.”
Meagan Glaser, vice president of LeadingAge New Jersey & Delaware, called the law a “broad law” and agreed that it will have “unintended consequences” that will negatively impact the entire healthcare system by imposing these “unprecedented restrictions” on the sale or transfer of a facility.
Ultimately, Fiery and Glaser agreed that this could result in the loss of access to care for residents and the unnecessary loss of jobs for workers.
“It also sets a dangerous precedent for future private transactions in other industries,” Glaser said. “Anyone below a managerial level – unionized or not – small business to our largest employers, those who receive government payments to those who do not, private and non-profit, would be subject to this legislation.”
Once ownership of a facility changes hands, job offers must be extended to eligible employees for a four-month transition period. Employees who accept these offers may only be terminated for cause or as part of a workforce reduction during the transition period. After the transition period, employees must receive a written performance review and an offer of continued employment if their employment has been “satisfactory”.
Glaser said the terms of employment, as written, would not be limited to a transition period, but would instead require employees to be retained or rehired “indefinitely” if cause does not exist or if a reduction in staff is not justified.
NJ Governor Phil Murphy (D) said the law guarantees continuity of employment for existing workers and continuity of care for residents.
“With this law, we will eliminate the uncertainty many healthcare workers face when transferring ownership by implementing the pay, benefits and employment protections these dedicated employees deserve.” , Murphy said when sign the invoice in August.