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New Jersey Adopts Changes Affecting Service Employees During Changes in Ownership

26 Oct


Update Applicable to:

New Jersey employers with service worker employees who sell their business to a respective buyer and employers who purchase an existing business that employs service workers.

What happened?

Governor Philip D. Murphy recently signed Assembly Bill 4682 / Senate Bill 2389, establishing various employment protections for specific “service employees” during changes of ownership. This bill went into effect on October 22, 2023.

What are the details?

This bill mandates that before change in ownership of a business that has service workers involved, a current employer must:

(1)     give 15-day notice to employees and their collective bargaining representatives.

(2)     post a notification at the job site about the change in property ownership.

(3)     provide the name of the new employer; and

(4)     provide the new employer with current employee information.

The new employer is required to keep the service worker employed for 60 days or until its service contract is terminated, whichever is earlier, and may not reduce the service worker’s hours to circumvent the law.

The bill provides an exception for the new employer, in which it can retain less than all the service employees if:

(1)     Fewer service workers are required to perform the work.

(2)     the new employer retains service workers by seniority.

(3)     maintains a preferential hiring list of those employees not retained and

(4)     hires any additional service employees from the list, in order of seniority until all affected service employees have been offered employment. 

As to the scope of the law, it applies only to certain covered locations, publicly or privately owned, which include but are not limited to:

  • multi-family residential building with more than 50 units.
  • commercial center or complex or an office building or complex occupying more than 100,000 square feet.
  • primary and secondary school, or tertiary educational institution.

For the complete list and additional information, please consult the following link here.

For more information, please see the links below:

Law Firm Articles: Article 1, Article 2

Official Press release: New Jersey communication

NJ Bill Part 1

News: Article 1

What do employers need to do?

The new amendments make the transaction of acquiring and selling of a business more costly due to the imposed retention. It is recommended that employers consult the resources provided above and speak with their employment attorney to see how this will impact their business or transactions.

Need help understanding how changes to employment laws will affect your business?

Learn more about how Vensure's New Jersey PEO services can help you navigate complex employment laws and keep your business compliant.

This communication is intended solely for the purpose of conveying information. The present post might incorporate hyperlinks directing readers to websites managed by third-party entities. The inclusion of any links within this communication is meant to serve as points of reference and could encompass opinion articles from various law firms, articles from HR associations, official websites, news releases, and documents of government agencies, and other relevant third-party sources. Vensure has no authority over these external websites and bears no responsibility for their content. Furthermore, Vensure does not endorse the materials present on these websites. The contents of this communication should not be interpreted as legal advice or as a legal standpoint concerning specific facts or scenarios. Nor should it be deemed an exhaustive compilation of facts potentially pertinent to federal, state, or local laws. It is strongly advised that employers solicit legal guidance from an employment attorney when undertaking actions in response to any legal updates provided. This is due to the possibility of future alterations occurring in federal, state, and local laws, regulations, as well as the directives and guidelines issued by governing agencies. These changes may transpire at any given time, potentially rendering certain portions of the content within this update void or inaccurate.

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