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07/04/2022 05:50 PM
Pennsylvania State Senate
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=S&SPick=20210&cosponId=37434
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Senate of Pennsylvania
Session of 2021 - 2022 Regular Session

MEMORANDUM

Posted: June 8, 2022 12:55 PM
From: Senator John I. Kane and Sen. Amanda M. Cappelletti, Sen. Anthony H. Williams, Sen. Timothy P. Kearney
To: All Senate members
Subject: For-Profit Healthcare Reform: Minimum Severance for Mass Layoffs
 
Health care in Delaware County is under siege from for-profit operators. Crozer Health, Delaware County’s major hospital system, is on the brink of collapse. Crozer Health’s for-profit parent company Prospect Medical Holdings has a history of acquiring hospitals, siphoning funds from the hospitals to generate substantial revenue, and then selling the hospital and health system real estate assets to another for-profit entity owned by a private equity company. This leaves the hospital and health systems with major financial burdens, debts, and large rent payments to the for-profit real estate owner. To deal with this financial burden, the firm running the hospital and health systems will shut down healthcare and hospital services and cut staff to generate a short-term profit and sizeable dividend.  The cuts to services and staff are so dramatic, that hospitals and health systems find themselves underfunded, understaffed, and overwhelmed, eventually resulting in closure. In other words, this is all according to their plan.
 
Some mass layoffs have resulted from Prospect Medical Holdings’ questionable financial and management decisions. More mass layoffs may happen in the future. While these issues are happening to the healthcare workers we represent in Delaware County, it is not limited to this situation. There have been over 300 WARN Act notices sent to the PA Department of Labor and Industry across numerous industries since January of 2020.
 
Mass layoffs disproportionately impact workers causing significant emotional, physical, and mental stress. Workers are the engines that keep our hospitals and health systems running and that generate revenue for companies and shareholders in many businesses across the commonwealth. In order to help workers, we plan to introduce a companion bill to Rep. Mike Zabel and Rep. Morgan Cephas House Bill 2179. This legislation requires minimum severance payments to workers during mass layoffs. The legislation includes numerous provisions including:
 
  • Employers must provide 90 days notice of mass layoffs to the Department of Labor and Industry or the notification required under the WARN Act, whichever is longer.
  • A mass layoff is defined as the termination of 50 or more employees in a 30-day period.
  • Employees eligible for the severance pay are all non-management, non-supervisory employees who work 20 hours or more per week.
  • Severance pay shall be equal to one week of pay for each full year of employment.
  • Severance payments under this legislation will be in addition to any severance payments available to workers through collective bargaining agreements.
 
Please join us to support this bill that will disincentivize mass layoffs, provide better benefits for workers, and prevent hospital and business closures from occurring across the Commonwealth.