The collapse of the local furniture chain has prompted efforts to make Michigan a second state to guarantee the retirement of workers who lose their jobs when employers shrink or close doors completely. ..
State Assembly member Advdullah Hammoud (D-Dearborn) will introduce a revised version of the 2019 bill on Wednesday that requires employees subject to mass dismissals, including bankruptcy, to receive a week-long severance pay each year.
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This measure follows the end of Art Van Furniture, a Warren-based chain that closed last year. A related bill package introduced last week to help workers includes a minimum wage of $ 15 and mandatory meal breaks and childcare support.
Hammoud’s first severance pay did not progress. Two years later, the pandemic raised awareness of front-line workers, but as a Republican-controlled state legislature bill, the bill will still face tough challenges.
After ArtVan’s bankruptcy filing was rushed to liquidation in March 2020, more than 3,000 employees were dismissed without notice, severance pay, or benefit compensation. These are all the beginnings of the global health crisis.
“I’m proud to work with this team to introduce a strong severance pay bill to prevent the devastation in Artvan from happening again in our state,” Hamoud emailed Bloomberg. Said in. “Wall Street executives protect their profits, but it’s our job to protect our working members from meaningless greed and exploitation.”
Since the closure of Toys “R” Us, several groups of retail workers have been organized that influenced the first forced dismissal law in New Jersey in 2020. They include Shopko Stores Inc, which is owned by Sun Capital Partners after liquidation. Employees are included. , And employees of Sears Holdings Corp., owned by ESL Investments, suffered mass dismissals in the 2018 bankruptcy.
They let go of ArtVan last year and, with the participation of advocacy group United for Respect, demanded that ArtVan’s private equity owner Thomas H. Lee reach out to his pocket to compensate them. Based in Boston, TH Lee eventually created a $ 2 million hardship fund.
The qualified victory was KKR & Co, the owner of the company, after a former Toys’R’Us employee campaigned in 2018. It happened after Bain Capital was convinced that it would create $ 20 million to compensate 30,000 ex-workers when the toy chain ran aground.
Julie Ford is one of the former workers who founded the Artvan Foundation and was involved in the effort to pass the Michigan bill. She is part of a group that meets every few weeks to develop a strategy. Ford, 51, started out as a part-time worker in 1991 and eventually moved to Artvan’s Human Resources department. After the company was closed, she realized that she and her husband were not insured. Eventually, she got an affordable care method plan with a monthly premium about $ 300 higher than she paid through ArtVan.
At that time, if the retirement law had been enforced, “it would have taken more time to look for medical care, cushioned retirement payments, and cost far more than we got,” Ford said. In an interview.
Federal law requires companies to notify them 60 days in advance of a mass severance or continue to pay wages during that period.
However, if the layoff takes place as part of Chapter 11, the rules of the Federal Bankruptcy Court will continue. When financial creditors are prioritized and repaid in cash from the sale of assets, new shares in a reorganized company, etc., workers often have nothing left, as in Toys’R’Us.
The Michigan Retirement Bill will affect employers with at least 100 workers, reduce at least 50, and apply to those who have been working for at least a year. All have lower thresholds than previous versions. It also extends the layoff employee notification period from 60 days to 90 days, including employees who are unemployed if the company relocates.