Guaranteed Severance Pay Could Be Coming To NJ

NEW JERSEY — Laid-off workers in New Jersey could get some much-needed severance pay if state officials approve legislation that guarantees them severance pay.

The Guaranteed Severance Pay Bill would, if approved, makes New Jersey the first state in the country to mandate severance pay for laid-off workers. Former employees would get one week of severance pay for each year of service to their company in instances when more than 50 employees are laid off.

The state Senate approved the bill in December by a vote of 27 to 13. The state Assembly will vote on the bill Monday. If approved, the legislation would go to Gov. Phil Murphy.

United For Respect is a nonprofit that is fighting for legislation like the one up for a vote in New Jersey. The organization has more than 16 million members who are fighting to improve the lives of people who work in retail.

Beth Hink is one of the leaders of United For Respect's New Jersey chapter. She worked for Payless ShoeSource for 20 years before she was laid off amid that company shuttering all of its North American stores in 2019. She received three days of severance pay as compensation.

"We don't have anybody going and saying, why aren't we getting more?" Hink said.

When speaking of the legislation, Hink said, "It's a start to protecting the employees," but more needs to be done.

"I think the next step is to take privacy equity firms who are dipping their toes in and cashing out, out of it," Hink said. "It's getting Wall Street out of it. They're not even interested in the company's profit, they are just trying to leverage the company to make money."

A way this hit New Jerseyans particularly hard was when 33,000 Toys R Us workers were laid off when the company sold off assets and closed 725 U.S. stores following a Chapter 11 bankruptcy filing.

Originally, none of those workers were slated to get any type of severance pay even after a federal bankruptcy judge ruled in 2018 that Toys R Us could pay 17 executives about $14 million in incentive bonuses if it hits a certain earnings amount. CEO David Brandon and four other executives shared $8.7 million in retention bonuses. (Related: Toys R US CEO Pocketed $2.8M Bonus)

Three of New Jersey's federal legislators, senators Cory Booker and Robert Menendez, and Rep. Bill Pascrell Jr., of the 9th District, met outside the Toys R Us store on Route 46 in Totowa and demanded fair severance pay for Toys R Us' 33,000 workers as the company began winding down U.S. operations.

A $20 million financial assistance fund was set up by KKR and Bain Capital to help former Toys R Us employees.

For more information about United For Respect, visit their website here.

Related:

• Toymakers Launch Last-Ditch Effort To Save Toys R Us
• Toys R US CEO Pocketed $2.8M Bonus
• Toys R Us Closing Is The End Of An Era
• Toys R Us Files Chapter 11 Bankruptcy, Outlines Strategy
• Toys R Us Workers Start Severance Pay Petition

Email: daniel.hubbard@patch.com