New Jersey: Protections for Service Employees During Changes in Ownership


All Employers with Service Employees in NJ


October 22, 2023



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Quick Look

  • AB 4682/SB 2389 creates employment protections for certain service employees during changes of ownership.


AB 4682/SB 2389 creates employment protections for certain service employees during changes of ownership. The law defines a service employee as an individual employed or assigned to a covered location on a full or part-time basis for at least 60 days and who is not a managerial or professional employee or regularly scheduled to work less than 16 hours per week. The law specifically covers the following services: care or maintenance of a building or property (e.g., work performed by a security guard; a front desk worker, a janitor; a maintenance employee; building superintendent; grounds maintenance worker; a stationary fireman; elevator operator and starter; or window cleaner); passenger-related security services, cargo-related and ramp services, in-terminal and passenger handling and cleaning services at an airport; or food preparation services at a primary or secondary school, or a tertiary educational institution.

A covered location includes: 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; cultural center or complex, such as a museum, convention center, arena or performance hall; industrial site or pharmaceutical lab; airport and train station; certain hospitals; state courts; and distribution centers or other facilities whose primary purpose is the storage or distribution of general merchandise, refrigerated goods, or other products.

The law changes how long a successor employer must retain an affected service employee at a covered location, the definition of the “transition period”, and the duration a successor employer must wait before discharging a retained service employee absent just cause for a period of 60 days (reduced from 90 days). A successor employer can retain less than all of the affected service employees during the 60-day transition period if it: 1) finds that fewer service employees are required to perform the work than the predecessor employer had employed; 2) retains service employees by seniority within each job classification; 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.

Fifteen days before a covered entity terminates a service contract, it must:  1) request (and have provided to them) a list containing the name and limited job information of each employee on the service contract; 2) provide written notice to any collective bargaining representative of the affected service employees of the decision to terminate the service contract, enter into a new service contract, or sell or transfer the property; 3) ensure that a written notice to all affected service employees describing the pending termination of the service contract, entrance into a service contract, or sale or transfer of the property,  is conspicuously posted at any affected work site; and 4) provide the affected service employees and their collective bargaining representative the name and address of any successor employer or the purchaser or transferee of the property.

Violations of the law may result in fines ranging from $2,500 to $5,000. Covered employers should consult with legal counsel prior to discharging any service employees pursuant to an acquisition.

Action Items

  1. Consult with legal counsel prior to sale or acquisition of covered service locations.
  2. Factor retention plans and processes into change of ownership.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2023 ManagEase