PRINTER'S NO. 2055
No. 1620 Session of 2005
INTRODUCED BY BELFANTI, GOODMAN, DeWEESE, BLACKWELL, PYLE,
SHANER, BEBKO-JONES, BELARDI, BISHOP, CALTAGIRONE, CASORIO,
DALEY, DeLUCA, FABRIZIO, GEORGE, GRUCELA, HARHAI, JOSEPHS,
MANDERINO, McGEEHAN, MUNDY, PISTELLA, PRESTON, SANTONI,
THOMAS, TIGUE, WALKO, WILLIAMS, YOUNGBLOOD, BIANCUCCI AND
JAMES, JUNE 3, 2005
REFERRED TO COMMITTEE ON LABOR RELATIONS, JUNE 3, 2005
AN ACT
1 Requiring notification of employees, the Department of Labor and
2 Industry and municipalities when mass layoffs and business
3 closings occur; and providing for civil penalties and for
4 powers and duties of the Department of Labor and Industry.
5 The General Assembly of the Commonwealth of Pennsylvania
6 hereby enacts as follows:
7 Section 1. Short title.
8 This act shall be known and may be cited as the Mass Layoff
9 and Business Closing Community Notification Act.
10 Section 2. Declaration of policy.
11 The General Assembly finds and declares as follows:
12 (1) The impact of business closings and job loss due to
13 mergers and downsizing can be devastating to both individuals
14 and communities.
15 (2) With adequate notice of business closings and job
16 loss due to mergers and downsizing, employees, unions, State
17 and local government, business and community leaders can take
1 action to prevent the job loss or to implement plans for new
2 employment opportunities.
3 Section 3. Definitions.
4 The following words and phrases when used in this act shall
5 have the meanings given to them in this section unless the
6 context clearly indicates otherwise:
7 "Affected employee." An employee who may reasonably be
8 expected to experience an employment loss as a consequence of a
9 proposed business closing or mass layoff by the employee's
10 employer.
11 "Business closing." The permanent or temporary shutdown of a
12 single site of employment, or one or more facilities or
13 operating units within a single site of employment, if the
14 shutdown results in an employment loss at the single site of
15 employment during any 30-day period for 50 or more employees,
16 excluding any part-time employees.
17 "Employer." A business enterprise that employs:
18 (1) 50 or more employees, excluding part-time employees,
19 whether at one or multiple sites; or
20 (2) 50 or more employees who in the aggregate work at
21 least 4,000 hours per week, exclusive of hours of overtime.
22 "Employment loss." Any of the following:
23 (1) An employment termination, other than a discharge
24 for cause, voluntary departure or retirement.
25 (2) A layoff exceeding six months.
26 (3) A reduction in hours of work of more than 50% during
27 each month of any six-month period.
28 "Mass layoff." A reduction in force which meets both of the
29 following criteria:
30 (1) Is not the result of a business closing.
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1 (2) Results in an employment loss at the single or
2 multiple sites of employment during any 30-day period for:
3 (i) (A) At least 33% of the employees; and
4 (B) at least 50 employees; or
5 (ii) at least 500 employees.
6 "Part-time employee." An employee who is employed for an
7 average of fewer than 20 hours per week or who has been employed
8 for fewer than 6 of the 12 months preceding the date on which
9 notice is required.
10 "Representative." An exclusive representative of employees
11 for collective bargaining purposes.
12 Section 4. Notice required before business closing and mass
13 layoffs.
14 (a) Parties to be notified.--An employer may not order a
15 business closing or mass layoff until the end of a 120-day
16 period after the employer serves written notice of the closing
17 or layoff order:
18 (1) To each representative of the affected employees as
19 of the time of the notice or, if there is no representative
20 at that time, to each affected employee.
21 (2) To the Department of Labor and Industry and the
22 chief elected official of the municipality within which the
23 closing or layoff is to occur. If there is more than one
24 municipality, the municipality which the employer shall
25 notify is the municipality to which the employer pays the
26 highest taxes for the year preceding the year for which the
27 determination is made.
28 (b) Reduction of notification period.--
29 (1) An employer may order a business closing or mass
30 layoff before the conclusion of the 120-day period if the
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1 closing or mass layoff is caused by business circumstances
2 that were not reasonably foreseeable as of the time that
3 notice would have been required.
4 (2) No notice under this act shall be required if the
5 business closing or mass layoff is due to any form of natural
6 disaster, including, but not limited to, a flood, earthquake
7 or drought.
8 (3) An employer relying on this subsection shall give as
9 much notice as is practicable and at that time shall give a
10 brief statement of the basis for reducing the notification
11 period.
12 (c) Extension of layoff period.--A layoff of more than six
13 months which, at its outset, was announced to be a layoff of six
14 months or less shall be treated as an employment loss under this
15 act unless:
16 (1) The extension beyond six months is caused by
17 business circumstances, including unforeseeable changes in
18 price or cost, not reasonably foreseeable at the time of the
19 initial layoff.
20 (2) Notice is given at the time it becomes reasonably
21 foreseeable that the extension beyond six months is required.
22 (d) Determinations with respect to employment loss.--For
23 purposes of this section, in determining whether a business
24 closing or mass layoff has occurred or will occur, employment
25 losses for two or more groups at a single site of employment,
26 each of which is less than the minimum number of employees
27 specified in the definition of "business closing" or "mass
28 layoff" under section 3 (relating to definitions), but which in
29 the aggregate exceed that minimum number, and which occur within
30 any 90-day period shall be considered to be a business closing
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1 or mass layoff unless:
2 (1) the employer demonstrates that the employment losses
3 are the result of separate and distinct actions and causes;
4 and
5 (2) the employer demonstrates that the employment losses
6 are not an attempt by the employer to evade the requirements
7 of this act.
8 Section 5. Special circumstances.
9 (a) Sale or merger of business.--
10 (1) In the case of a sale or merger of part or all of an
11 employer's business, the seller or original employer shall be
12 responsible for providing notice for any business closing or
13 mass layoff in accordance with section 4 (relating to notice
14 required before business closing and mass layoffs), up to and
15 including the effective date of the sale or merger.
16 (2) After the effective date of the sale or merger of
17 part or all of an employer's business, the purchaser or
18 resulting merged entity shall be responsible for providing
19 notice for any business closing or mass layoff in accordance
20 with section 4.
21 (3) Notwithstanding any other provision of this act, any
22 person who is an employee of the seller or original employer
23 other than a part-time employee as of the effective date of
24 the sale or merger shall be considered an employee of the
25 purchaser or resulting merged entity immediately after the
26 effective date of the sale or merger.
27 (b) Exception.--An employee may not be considered to have
28 experienced an employment loss if the closing or layoff is the
29 result of the relocation or consolidation of part or all of the
30 employer's business and, prior to the closing or layoff:
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1 (1) the employer offers to transfer the employee to a
2 different site of employment within a reasonable commuting
3 distance with no more than a six-month break in employment;
4 or
5 (2) the employer offers to transfer the employee to any
6 other site of employment regardless of distance with no more
7 than a six-month break in employment and the employee accepts
8 within 30 days of the offer or of the closing or layoff,
9 whichever is later.
10 Section 6. Exemptions.
11 (a) General rule.--This act shall not apply to a business
12 closing or mass layoff if:
13 (1) The closing is of a temporary facility or the
14 closing or layoff is the result of the completion of a
15 particular project or undertaking and the affected employees
16 were hired with the understanding that their employment was
17 limited to the duration of the facility or the project or
18 undertaking.
19 (2) The closing or layoff constitutes a strike or
20 constitutes a lockout not intended to evade the requirements
21 of this act.
22 (b) Economic strikers.--Nothing in this act shall require an
23 employer to serve written notice pursuant to section 4 (relating
24 to notice required before business closing and mass layoffs)
25 when permanently replacing a person who is deemed to be an
26 economic striker under the National Labor Relations Act (49
27 Stat. 449, 29 U.S.C. § 151 et seq.). Nothing in this act shall
28 be deemed to validate or invalidate any judicial or
29 administrative ruling relating to the hiring of permanent
30 replacements for economic strikers under the National Labor
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1 Relations Act.
2 Section 7. Administration and enforcement of requirements.
3 (a) Civil actions against employers.--
4 (1) Any employer who orders a business closing or mass
5 layoff in violation of section 4 (relating to notice required
6 before business closing and mass layoffs) shall be liable to
7 each aggrieved employee who suffers an employment loss as a
8 result of the closing or layoff for:
9 (i) back pay for each day of violation at a rate of
10 compensation not less than the higher of:
11 (A) the average regular rate received by the
12 employee during the last three years of the
13 employee's employment; or
14 (B) the final regular rate received by the
15 employee; and
16 (ii) benefits under an employee benefit plan,
17 including the cost of medical expenses incurred during
18 the employment loss which would have been covered under
19 an employee benefit plan if the employment loss had not
20 occurred.
21 Liability shall be calculated for the period of the violation
22 up to a maximum of 60 days but in no event for more than one-
23 half the number of days the employee was employed by the
24 employer.
25 (2) The amount for which an employer is liable under
26 paragraph (1) shall be reduced by:
27 (i) any wages paid by the employer to the employee
28 for the period of the violation;
29 (ii) any voluntary and unconditional payment by the
30 employer to the employee that is not required by any
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1 legal obligation; and
2 (iii) any payment by the employer to a third party
3 or trustee, such as premiums for health benefits or
4 payments to a defined contribution pension plan on behalf
5 of and attributable to the employee for the period of the
6 violation.
7 (3) In addition, any liability incurred under paragraph
8 (1) with respect to a defined benefit pension plan may be
9 reduced by crediting the employee with service for all
10 purposes under the plan for the period of the violation.
11 (4) Any employer who violates the provisions of section
12 4 with respect to a municipality shall be subject to a civil
13 penalty of not more than $500 for each day of the violation,
14 except that this penalty shall not apply if the employer pays
15 to each aggrieved employee the amount for which the employer
16 is liable to that employee within three weeks from the date
17 the employer orders the closing or layoff.
18 (5) If an employer which has violated this act proves to
19 the satisfaction of the court that the act or omission that
20 violated this act was in good faith and that the employer had
21 reasonable grounds for believing that the act or omission was
22 not a violation of this act, the court may, in its
23 discretion, reduce the amount of the liability or penalty
24 provided for in this section.
25 (6) A person seeking to enforce liability, including a
26 representative of employees or a municipality aggrieved under
27 paragraph (1) or (4), may sue either for the person or for
28 other persons similarly situated, or both, in any court of
29 common pleas in which the violation is alleged to have
30 occurred, or in which the employer transacts business.
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1 (7) In an action under this subsection, the court, in
2 its discretion, may allow the prevailing party reasonable
3 attorney fees as part of the costs.
4 (b) Exclusivity of remedies.--The remedies provided for in
5 this section shall be the exclusive remedies for any violation
6 of this act.
7 (c) Definition.--As used in this section, the term
8 "aggrieved employee" means an employee who has worked for the
9 employer ordering the business closing or mass layoff and who,
10 as a result of the failure by the employer to comply with
11 section 4, did not receive timely notice either directly or
12 through the employee's representative as required by section 4.
13 Section 8. Procedures in addition to other rights of employees.
14 The rights and remedies provided to employees by this act are
15 in addition to and not in lieu of any other contractual or
16 statutory rights and remedies of the employees and are not
17 intended to alter or affect those rights and remedies, except
18 that the period of notification required by this act shall run
19 concurrently with any period of notification required by
20 contract or by any other statute.
21 Section 9. Authority to prescribe regulations.
22 (a) General rule.--The Department of Labor and Industry
23 shall prescribe regulations as may be necessary to carry out
24 this act. Regulations shall include, at a minimum,
25 interpretative regulations describing the methods by which
26 employers may provide for appropriate service of notice as
27 required by this act.
28 (b) Form of notice.--The mailing of notice to an employee's
29 last known address or inclusion of notice in the employee's
30 paycheck shall be deemed acceptable methods for fulfillment of
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1 the employer's obligation to give notice to each affected
2 employee under this act.
3 Section 10. Effective date.
4 This act shall take effect in 60 days.
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