PRINTER'S NO. 4039
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2642
Session of
2020
INTRODUCED BY ZABEL, CEPHAS, FREEMAN, DONATUCCI, NEILSON,
HANBIDGE, DELLOSO, A. DAVIS, McCLINTON, DeLUCA, HILL-EVANS,
HOWARD, LEE, YOUNGBLOOD, HARKINS, KINSEY, MADDEN AND OTTEN,
JUNE 29, 2020
REFERRED TO COMMITTEE ON LABOR AND INDUSTRY, JUNE 29, 2020
AN ACT
Relating to transfers of operations, terminations of
operations, mass layoffs and changes in control.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Short title.
This act shall be known and may be cited as the Mandatory
Severance for Mass Layoffs Act.
Section 2. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Business." An individual, partnership, association,
corporation or any person or group of persons that employs 50 or
more employees.
"Change of control." A material change in ownership of an
employer or a filing seeking bankruptcy protection.
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"Covered employee." The following:
(1) An individual who has been employed by an employer
for at least 90 days immediately before a change of control
affecting that individual's principal place of employment. A
change of control affects a covered employee's principal
place of employment if the change of control results in the
predecessor employer transferring control of the place of
employment to the successor employer.
(2) The term does not include:
(i) a managerial, supervisory or confidential
employee;
(ii) a temporary employee; or
(iii) a part-time employee who has worked less than
20 hours per week for the predecessor employer for at
least 90 days immediately before the change of control.
"Department." The Department of Labor and Industry of the
Commonwealth.
"Employer." An individual, partnership, association,
corporation or a person or group of persons acting directly or
indirectly in the interest of an employer in relation to an
employee, including a person who, directly or indirectly, owns
and operates the nominal employer or owns a corporate subsidiary
that, directly or indirectly, owns and operates the nominal
employer or makes the decision responsible for the employment
action that gives rise to a mass layoff subject to notification.
"Establishment." A single place of employment that has been
operated by an employer for more than three years, including a
single location or a group of locations in this Commonwealth.
The term does not include a temporary construction site.
"Facility." A building.
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"Mass layoff." A reduction in force that is not the result
of a transfer of operations or termination of operations and
that results in the termination of employment at an
establishment during any 30-day period for 50 or more
employees at or reporting to the establishment.
"Operating unit." An organizationally distinct product,
operation or specific work function within or across facilities
at a single establishment.
"Predecessor employer." The person who controls a business
before a change of control.
"Principal place of employment." An office or other facility
where an employee is principally assigned to work by a
predecessor employer.
"Successor employer." A person who controls a business after
a change of control.
"Termination of employment." The following:
(1) The layoff of an employee without a commitment to
reinstate the employee to the employee's previous employment
within six months of the layoff.
(2) The term does not mean:
(i) a voluntary departure;
(ii) retirement;
(iii) discharge;
(iv) suspension for misconduct connected with
employment;
(v) layoff of a seasonal employee; or
(vi) a situation in which an employer offers to an
employee, at a location inside this Commonwealth and not
more than 50 miles from the previous place of employment,
the same employment or a position with equivalent status,
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benefits, pay and other terms and conditions of
employment.
(3) A layoff under paragraph (1) of more than six months
which, at its outset, was announced to be a layoff of six
months or less, shall not be treated as a termination of
employment if the extension beyond six months is caused by
business circumstances not reasonably foreseeable at the time
of the initial layoff and notice is given at the time it
becomes reasonably foreseeable that the extension beyond six
months will be required.
"Termination of operations." The following:
(1) The permanent or temporary shutdown of a single
establishment or of one or more facilities or operating units
within a single establishment.
(2) The term does not include a termination of
operations made necessary because of a fire, flood, natural
disaster, national emergency, act of war, civil disorder or
industrial sabotage, decertification from participation in
the Medicare and Medicaid programs as provided under Titles
XVIII and XIX of the Social Security Act (49 Stat. 620, 42
U.S.C. § 301 et seq.) or license revocation under the laws of
this Commonwealth.
"Total compensation." The following:
(1) The combined value of a covered employee's wages and
benefits immediately before a change of control. Total
compensation may be paid entirely as wages or in any
combination of wages and fringe benefits, to be determined by
the successor employer.
(2) The term includes, but is not limited to, a covered
employee's hourly wage rate or the per diem value of the
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covered employee's monthly salary and the employer payments
toward the covered employee's health and welfare and pension
benefits.
"Transfer of operations." The permanent or temporary
transfer of a single establishment or one or more facilities or
operating units within a single establishment to another
location within or outside this Commonwealth.
"Transition period." A period of 180 days immediately
following the effective date of a change of control.
Section 3. Transfer of operations, termination of operations or
mass layoff.
(a) Notification.--If an establishment is subject to a
transfer of operations or termination of operations which
results, during any continuous period of not more than 30 days,
in the termination of employment of 50 or more employees, or if
an employer conducts a mass layoff, the employer who operates
the establishment or conducts the mass layoff shall provide not
less than 90 days, or the period of time required under the
Worker Adjustment and Retraining Notification Act (Public Law
100-379, 29 U.S.C. § 2101 et seq.), whichever is longer, before
the first termination of employment occurs in connection with
the transfer of operations, termination of operations or mass
layoff, notification of the transfer of operations, termination
of operations or mass layoff to:
(1) the department;
(2) the chief elected official of the municipality where
the establishment is located;
(3) each employee whose employment is to be terminated;
and
(4) any collective bargaining units of employees at the
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establishment.
(b) Severance.--An employer subject to subsection (a) shall
provide severance pay as follows:
(1) The employer shall provide to each employee whose
employment is terminated severance pay equal to one week of
pay for each full year of employment.
(2) If the employer provides an employee with less than
the number of days of notification required under subsection
(a), the employer shall provide that employee with an
additional four weeks of severance pay.
(3) The rate of severance pay provided by the employer
under this paragraph shall be the average regular rate of
compensation received during the employee's last three years
of employment with the employer or the final regular rate of
compensation paid to the employee, whichever rate is higher.
(4) Severance pay under this subsection shall be
regarded as compensation due to an employee for back pay and
losses associated with the termination of the employment
relationship, and earned in full upon the termination of the
employment relationship, notwithstanding the calculation of
the amount of the payment with reference to the employee's
length of service.
(5) Severance pay provided by the employer under this
subsection shall be in addition to any severance pay provided
by the employer under a collective bargaining agreement or
for any other reason, except that any back pay provided by
the employer to the employee under section 5 of the Worker
Adjustment and Retraining Notification Act because of a
violation of section 3 of that act shall be credited toward
meeting the severance pay requirements of this subsection.
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(6) Severance pay under this subsection shall not be
subject to the provisions of section 404(d) of the act of
December 5, 1936 (2nd Sp.Sess., 1937 P.L.2897, No.1), known
as the Unemployment Compensation Law.
(c) Qualification for notification.--In determining whether
a transfer of operations, termination of operations or a mass
layoff is subject to the notification requirements of this
section, any terminations of employment for two or more groups
at a single establishment occurring within any 90-day period
when each group has less than the number of terminations that
would trigger the notification requirements of this section but
the aggregate for all of the groups exceeds that number shall be
regarded as subject to the notification requirements, unless the
employer demonstrates that the cause of the terminations for
each group is separate and distinct from the causes of the
terminations for the other group or groups.
(d) Approval of waiver.--A waiver of the right to severance
provided under subsection (b) shall not be effective without
approval of the waiver by the department or a court of competent
jurisdiction.
Section 4. Change of control.
(a) Retention of employees.--
(1) Except as otherwise provided in this section, a
successor employer shall retain all covered employees for at
least the transition period following a change of control,
unless the department approves a reduction in the workforce
under subsection (e). During the transition period, the
successor employer may not terminate a covered employee
without cause and may not reduce the total compensation of a
covered employee.
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(2) A successor employer and a labor organization
representing covered employees may, in a collective
bargaining agreement, provide that the agreement supersedes
the requirements of this section.
(b) Public notice.--
(1) No later than 15 days before the effective date of a
change of control, the predecessor employer shall:
(i) Post public notice of the change of control at
each principal place of employment.
(ii) Send notice of the change of control to any
labor organization that represents covered employees.
(2) The notice shall include the name and contact
information of the predecessor employer, the name and contact
information of the successor employer and the effective date
of the change of control.
(3) The notice shall be posted at each principal place
of business of the predecessor employer in a conspicuous
place and in a manner that is readily viewable by covered
employees.
(c) Employee information.--No later than 15 days before the
effective date of a change of control, a predecessor employer
shall provide to the successor employer the name, address, date
of hire, total compensation and classification of each covered
employee.
(d) Retention of records.--A successor employer shall retain
the following written or electronic records for at least three
years:
(1) The information provided to the successor employer
under subsection (c).
(2) Any offer of employment made to a covered employee.
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(3) Any termination of a covered employee during a
transition period, including the reasons for the termination.
(4) Any written evaluation of a covered employee.
(e) Reduction of employees.--
(1) For two years after the transition period, a
successor employer may reduce the total number of employees
who would have qualified as covered employees during the 90-
day period immediately before a change of control only if
approved by the department.
(2) The department may not authorize a successor
employer to reduce the number of employees under paragraph
(1) except upon a showing by a preponderance of the evidence
that the employer has conducted a study of the nature and
scope of the work performed by those employees proposed to be
eliminated, and the study shows that the elimination of the
employees is necessary for the continued solvency of the
business.
(3) A successor employer may terminate an employee with
cause consistent with any applicable collective bargaining
agreement during the period specified in paragraph (1).
(f) Construction.--This section may not be construed to
limit the right of covered employees to bring legal action for
wrongful termination.
(g) Rights and remedies.--The rights and remedies provided
under this section are in addition to, and are not intended to
supplant, any existing rights or remedies.
Section 5. Effective date.
This act shall take effect immediately.
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