December 6, 2018, Introduced by Reps. Hammoud, Clemente, Hertel, Lasinski, Gay-Dagnogo, Geiss, Wittenberg and Greig and referred to the Committee on Commerce and Trade.
A bill to require certain employers that close or relocate an
establishment or engage in a mass layoff to pay severance pay to
certain employees; to provide for the powers and duties of certain
state governmental officers and entities; to authorize the
promulgation of rules; and to provide remedies.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"relocation, closing, and mass layoff severance pay act".
Sec. 3. As used in this act:
(a) "Closing" or "closes" means the permanent shutdown of
commercial operations at a covered establishment. A closing may
occur because of a relocation or a termination or consolidation of
the employer's business.
(b) "Covered establishment" means a commercial facility or a
part of a commercial facility that employs, or has employed at any
time in the 12-month period immediately preceding a closing, mass
layoff, or relocation, 100 or more employees.
(c) "Department" means the department of licensing and
regulatory affairs.
(d) "Director" means the director of the department, or his or
her designee.
(e) "Eligible employee" means an employee who meets all of the
following conditions:
(i) At the time of the closing or mass layoff, has been
continuously employed at the covered establishment for at least 3
years, including any period when the employee was on a leave of
absence. The requirement that the employee be employed at the time
of the closing or mass layoff does not apply to an employee who
voluntarily quit employment at the covered establishment to take a
new job 30 or less days before the date set by the employer for a
closing or mass layoff in an initial notice provided by the
employer under state or federal law.
(ii) Has not been discharged for cause.
(iii) Has not accepted employment at another or relocated
establishment operated by the employer.
(f) "Employer" means a person who directly or indirectly owns
and operates a covered establishment. A parent corporation is
considered an indirect owner and operator of any covered
establishment that is directly owned and operated by its corporate
subsidiary.
(g) "Gross earnings" includes all pay for regular hours, shift
differentials, premiums, overtime, floating holidays, holidays,
funeral leave, jury duty pay, sick pay, and vacation pay earned
within the 12-month period immediately preceding the closing or
mass layoff. Gross earnings does not include payments made under a
third-party benefit program, such as disability payments.
(h) "Mass layoff" means a reduction in workforce, not the
result of a closing, that, for at least 6 months, results in an
employment loss at a covered establishment of either of the
following:
(i) Thirty-three percent of the employees and at least 50
employees.
(ii) Five hundred employees.
(i) "Physical calamity" means a calamity such as fire, flood,
or other natural disaster.
(j) "Relocation" means the removal of all or substantially all
of commercial operations in a covered establishment to a new
location, within or without this state, 100 or more miles distant
from its original location.
(k) "Week's pay" means an amount equal to an employee's gross
earnings during the 12-month period immediately preceding the month
of the closing or mass layoff, as determined by the department,
divided by the number of weeks in which the employee received gross
earnings during that 12-month period.
Sec. 5. (1) Subject to subsection (2), an employer that closes
or engages in a mass layoff at a covered establishment shall pay to
an eligible employee of the covered establishment severance pay at
the rate of 1 week's pay for each year that the employee was
employed at the covered establishment and partial pay for any
partial year. The severance pay to eligible employees under this
section is in addition to any final wage payment to the employee
and must be paid within 1 regular pay period after the employee's
last full day of work.
(2) Subsection (1) does not apply if either of the following
circumstances exist:
(a) The closing of or a mass layoff at a covered establishment
is necessitated by a physical calamity or the final order of a
federal, state, or local government agency.
(b) The employee is covered by, and has been paid under the
terms of, a written contract providing for severance pay that is in
an amount that is greater than the severance pay required by this
act. An employer must demonstrate, to the satisfaction of the
department, that the severance pay provided under the terms of the
contract is in an amount that is greater than the severance pay
required by this act.
(3) An employer is not exempt from liability for severance pay
under this act solely because it files a voluntary petition for
bankruptcy protection under chapter 7 or chapter 11 of title 11 of
the federal bankruptcy code, 11 USC 701 to 784 and 11 USC 1101 to
1174, or because an involuntary petition is commenced against it
pursuant to section 303 of the federal bankruptcy code, 11 USC 303.
(4) An employer that violates this section may be ordered to
pay a civil fine of not more than $1,000.00 for each separate
violation. A violation of this section may be prosecuted by the
prosecutor of the county in which the violation occurred or by the
attorney general. A civil fine must not be imposed under this
subsection if doing so would prevent the violator from making all
payments required under subsection (1).
Sec. 7. An employer that violates this act is liable to an
affected employee in the amount of the employee's unpaid severance
pay under this act. One or more employees may bring an action, for
and on behalf of that employee or those employees and any other
employees similarly situated, in any court of competent
jurisdiction to recover the unpaid severance pay. A labor
organization may bring an action on behalf of its members. A court,
in an action brought under this section, in addition to any
judgment awarded to the plaintiff, shall allow for a reasonable
attorney fee and costs of the action to be recovered by the
plaintiff.
Sec. 9. The department may bring an action in any court of
competent jurisdiction to recover unpaid severance pay under this
act. The right of an employee to commence an action and of an
employee to become a party plaintiff to any pending action brought
under section 7 terminates upon the filing of a complaint by the
department in an action under this section, unless the action is
dismissed without prejudice by the department. Money from an award
recovered by the department on behalf of an employee under this
section must be held in a special deposit account and must be paid,
on order of the director, to the employee. Money from an award in
the special deposit account remaining 3 or more years after the
final disposition of the action, if the money has remained in the
special deposit account because of inability to pay the employee,
must be deposited into the general fund.
Sec. 11. (1) An employer shall notify the department in
writing not less than 60 days before relocating or closing a
covered establishment. An employer shall notify the department as
far in advance as practicable, but no later than within 7 days
before a mass layoff at a covered establishment, and shall report
to the department in writing the expected duration of the mass
layoff and whether it is of indefinite or definite duration. The
department shall periodically, but no less frequently than every 30
days, require the employer to report facts that the department
considers relevant to determine whether the mass layoff constitutes
a closing or whether there is a substantial reason to believe the
affected employees will be recalled. A notification or report
provided to the department under this section must contain all
relevant information in the possession of the employer regarding a
potential recall, if applicable.
(2) To monitor compliance with the requirements of this act,
an employer shall allow the department access to its employees'
wage records, with appropriate notice and at a mutually agreeable
time.
Sec. 13. An employer shall notify the employees of a covered
establishment and the officers of the municipality where the
covered establishment is located in writing not less than 60 days
before closing the covered establishment, unless this notice
requirement is waived by the department. An employer that violates
this section is responsible for a state civil infraction and may be
ordered to pay a civil fine of not more than $500.00. The
department shall not collect a civil fine imposed under this
section if any of the following circumstances exist:
(a) The closing is necessitated by a physical calamity or the
final order of a federal, state, or local government agency.
(b) The failure to give notice is due to unforeseen
circumstances.
(c) Collecting the civil fine would prevent the violator from
making all payments required under section 5(1).
Sec. 15. Benefits paid or payable to an eligible employee
under the Michigan employment security act, 1936 (Ex Sess) PA 1,
MCL 421.1 to 421.75, do not reduce the amount of severance pay the
eligible employee is entitled to receive under this act.
Sec. 17. The department may promulgate rules to implement this
act pursuant to the administrative procedures act of 1969, 1969 PA
306, MCL 24.201 to 24.328.
Sec. 19. This act applies to employment agreements and
collective bargaining agreements that are executed, extended, or
renewed on or after the effective date of this act.
Enacting section 1. This act takes effect 90 days after the
date it is enacted into law.