Home National News DeSaulnier Introduces Legislation to Protect Workers from Mismanaged Closures and Layoffs

DeSaulnier Introduces Legislation to Protect Workers from Mismanaged Closures and Layoffs

Press Release

by ECT
Rep Mark DeSaulnier

Bill Cracks Down on Corporate Greed Following Elon Musk’s Unjustified Mass Layoffs

Washington, D.C. – Today, Chair of the Subcommittee on Health, Employment, Labor, and Pensions Mark DeSaulnier (CA-11) introduced the Justice for Local Communities and Workers Act (H.R. 9305), a bill that would protect local communities and workers from mismanaged closures and layoffs like those seen recently at Twitter.

Specifically, the bill would require large corporations to evaluate, consider, and mitigate the impacts any possible closure or downsizing would have on the local workforce and economy.

“While big corporations rake in record profits, local communities and their employees are treated as disposable rather than the engine of their growth, as we saw recently in billionaire CEO Elon Musk’s haphazard firing of over 7,500 Twitter employees,” said Chairman DeSaulnier. “With more layoffs expected in the tech industry, by expanding and strengthening existing law to protect workers from such unfair layoffs, this bill would ensure CEOs like Musk are held accountable and that the balance of power is restored to the American workforce.”

The Justice for Local Communities and Workers Act would build on existing laws to better prepare and support workers in these situations, better help states and localities provide services for dislocated workers, and identify and prepare for changes in the local labor market. Federal law currently only requires big corporations to provide 60 days’ notice to affected employees, states, and localities if they choose to shut down or do mass layoffs, an unreasonable amount of time for working Americans to prepare. Additionally, this timetable does not allow for these companies to be properly held accountable for the negative effects their decision has not only on their workers, but also on the local economy.

Specifically, H.R. 9305 would close loopholes in how employees are counted that allow big corporations to skirt their responsibilities under federal law, increase penalties for violations to give workers twice the backpay they are owed, and ensure that local governments have the power to sue a company that fails to give workers enough notice of a closure. Additionally, the legislation would require corporations voluntarily closing or laying off workers to conduct an economic impact study to determine the real cost of their closure or relocation on the local workforce and economy. Companies that choose to close or relocate even if it is determined there would be a negative economic impact would be required to pay into an Impacted Workers Fund, which would help support the workers and businesses affected by the closure. This bill also provides exemptions for businesses closing due to financial hardship.

Congressman DeSaulnier is a former small business owner, union member, and mayor and currently serves on the House Committee on Education and Labor. Inspiration for this legislation came from his work on the Future of Work, Wages, and Labor initiative he spearheaded to address the big issues facing our economy like wage stagnation, rising inequality, and declining union membership.

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