Bill Text: MI HB5890 | 2023-2024 | 102nd Legislature | Introduced
Bill Title: 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.
Spectrum: Partisan Bill (Democrat 14-0)
Status: (Introduced) 2024-07-31 - Bill Electronically Reproduced 07/31/2024 [HB5890 Detail]
Download: Michigan-2023-HB5890-Introduced.html
HOUSE BILL NO. 5890
the people of the state of michigan enact:
Sec. 1. This act may be cited as the "relocation, closing, and mass layoff severance pay act".
(a) "Closing" or "closes" means the permanent shutdown of a covered establishment. A closing may occur because of a relocation, a termination, or the consolidation of the covered employer's operations.
(b) "Compensation" means all wages, salaries, fees, bonuses, commissions, and other payments made on behalf of or for the benefit of an eligible employee.
(c) "Covered employer" means a person that 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.
(d) "Covered establishment" means a facility or part of a facility at which in the 12-month period immediately preceding a closing, mass layoff, or relocation, both of the following conditions were met:
(i) 20 or more employees worked, regardless of whether the employees worked at the facility at the same time.
(ii) The employees described in subparagraph (i) received in the aggregate a total of $2,000,000.00 or more in compensation.
(e) "Department" means the department of labor and economic opportunity.
(f) "Director" means the director of the department or the director's designee.
(g) "Eligible employee" means an employee who meets all of the following conditions:
(i) At the time of a closing or mass layoff, the employee has been continuously employed at the covered establishment for at least 1 year, 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 days or less before the date set by the covered employer for a closing or mass layoff in an initial notice provided by the covered employer that is required under this act or federal law.
(ii) The employee has not been discharged for cause.
(iii) The employee has not accepted employment at another or relocated facility operated by the covered employer.
(h) "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 a closing or mass layoff. Gross earnings does not include payments made under a third-party benefit program, such as disability payments.
(i) "Mass layoff" means a reduction in a covered employer's workforce, not the result of a closing, that results in a loss of 20 or more employees at a covered establishment.
(j) "Relocation" means the removal of all or substantially all operations in a covered establishment to a new location, within or outside 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 a 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) A covered 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 eligible employee was employed at the covered establishment and partial pay for any partial year. The severance pay to an eligible employee under this section is in addition to any final wage payment to the eligible employee and must be paid not later than 1 regular pay period after the employee's last full day of work.
(2) A covered 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 1195, or because an involuntary petition is commenced against it pursuant to section 303 of the federal bankruptcy code, 11 USC 303.
(3) A covered employer that violates this section is subject to a civil fine of not more than $1,000.00 for each separate violation. The prosecutor of the county in which the violation occurred or the attorney general may bring an action to collect the fine. 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. (1) A covered employer that violates this act is liable to an affected eligible employee for both of the following amounts:
(a) The amount of the severance pay required to be paid to the eligible employee under this act that remains unpaid.
(b) An additional 4 weeks' pay.
(2) Notwithstanding section 9 or any other provision of law, 1 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 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. An action brought under this section must be brought not later than 6 years after the date of the violation.
Sec. 9. The department or attorney general may bring an action in any court of competent jurisdiction to recover unpaid severance pay under this act. An employee is not prohibited from bringing, or being a plaintiff in, an action under section 7(2) because the department or the attorney general brings an action under this section. Money from an award recovered by the department or attorney general 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 or attorney general, 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 the inability to pay the employee, must be deposited into the general fund. An action brought under this section must be brought not later than 6 years after the date of the violation.
Sec. 11. (1) A covered employer shall notify the department in writing not less than 90 days before relocating or closing a covered establishment. A covered employer shall notify the department as far in advance as is practicable, but not less than 90 days before, of a mass layoff at a covered establishment, and shall report to the department in writing the date that the covered employer expects to begin recalling employees and the date by which the covered employer expects to have recalled all of the employees. A notification or report provided to the department under this section must include all relevant information in the possession of the covered employer regarding a potential recall, if applicable.
(2) To monitor compliance with the requirements of this act, a covered employer shall allow the department access to its employees' compensation records, with appropriate notice from the department and at a mutually agreeable time.
(3) The department shall create a poster for use by covered employers that includes statements that summarize an employee's rights under this act. A covered employer shall display the poster at each of its work sites in a conspicuous location that is accessible to its employees. A covered employer that violates this subsection is subject to a civil fine of not more than $5,000.00 for each separate violation. The prosecutor of the county in which the violation occurred or the attorney general may bring an action to collect the fine.
Sec. 13. (1) A covered 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 90 days before closing the covered establishment, unless this notice requirement is waived by the department. A covered 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 $1,000.00.
(2) A civil fine imposed under this section must not be collected if 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 an eligible employee is entitled to receive under this act.
Sec. 17. Not later than 90 days after the effective date of this act, the department shall promulgate rules to implement this act under the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.
Sec. 19. (1) This act does not prohibit a covered employer from entering into a collective bargaining agreement or other agreement that requires the covered employer to pay to an employee severance pay in an amount that is greater than the amount required under this act. If a covered employer does not pay severance pay to an eligible employee in accordance with a collective bargaining agreement or other agreement, and if the covered employer would otherwise be required to pay severance pay to the eligible employee under this act, the covered employer shall pay to the eligible employee severance pay in accordance with this act.
(2) If a collective bargaining agreement or other agreement that is in effect on the effective date of this act conflicts with this act, this act applies to the parties to the agreement on the date that the agreement expires or is terminated, amended, extended, or renewed.
Enacting section 1. This act takes effect 90 days after the date it is enacted into law.
