Michigan House Bill HB5890

Michigan 2023-2024 Regular Session

• Introduced: 7/30/24
• Refer: 7/30/24

Caption

Labor: fair employment practices; severance pay for certain employees who are laid off; require employers to pay for relocations and mass layoffs. Creates new act.

Impact

The act significantly alters existing employment regulations by requiring covered employers to notify employees at least 90 days in advance of any closures or mass layoffs. This advance notice is designed to prepare employees for potential job loss and assistance in seeking new employment. Additionally, employers are required to pay severance that equates to one week's pay for each year of employment, further enhancing the financial protection for workers facing job displacement due to corporate decisions.

Summary

House Bill 5890, known as the 'Relocation, Closing, and Mass Layoff Severance Pay Act,' mandates that employers who close or relocate their establishments or enact mass layoffs must provide severance pay to eligible employees. This legislation is aimed at ensuring that employees who are laid off or affected by significant business changes are compensated adequately, thereby providing them financial security during transitional periods. The bill outlines specific conditions that define a 'covered establishment' and 'eligible employee' to determine who qualifies for severance pay.

Contention

While the bill aims to protect the rights of the workforce during closures and layoffs, there are potential areas of contention. Critics may argue that this legislation imposes an additional financial burden on employers, particularly small businesses already grappling with economic pressures. There may also be concerns over how the terms of eligible layoffs and severance compensation are defined, including disputes over who qualifies for aid and the evaluation of compensation metrics used in calculating severance pay.

Enforcement

The act allows the state department to impose civil penalties for non-compliance, including fines of up to $5,000 for failing to display required employee rights information and potential legal action to recover unpaid severance. Moreover, the legislation stipulates that any benefits received by the affected employees under state employment security laws do not reduce their entitlement to severance under this act, ensuring comprehensive support for laid-off workers.