The new law would require thatworkers at all companies employing 50 or more people to pay workersat least a week's wages for every year of work. (Photo:Bloomberg)

Phil Murphy, governor of New Jersey, is expected to sign a billjust passed by the New Jersey legislature that would guaranteeseverance pay to employees in mass layoffs.

The Nation reports that the measure is a response to twoyears of employer bankruptcies that resulted in the termination ofthousands of workers. Fifteen hundred Toys "R" Us workers in New Jersey were cutadrift in 2017 with no severance; employees at Payless Shoe Sourceand Sears were likewise left without a financiallifeline.

Related: Severance benefits on the rise

Toys "R" Us and Sears employees fought for some recompense, withvarying degrees of success; the former got a $20 million hardshipfund—far less than they'd sought, but still something—from thecompany's private equity owners, KKR and Bain, while the latter atleast temporarily convinced hedge fund boss Eddie Lampert of ESLInvestments, Inc. to promise up to $43 million to laid-off workers.Lampert, however, tried to bail on the arrangement later.

The new law would instead require that workers at allcompanies—not just retailers—employing 50 or more people to payworkers at least a week's wages for every year of work when theylay off at least 50 people. It's the brainchild of New Jersey StateSenator Joseph Cryan, who said in the report that he was "justtired of the little guy getting screwed."

The bill has other provisions, too, says The Nation: it wouldrequire more notice for employees before layoffs actually occur, aswell as job protection for a certain period of time, andpreferential status for severance pay in the bankruptcyprocess.

And financial owners like Eddie Lampert's hedge fund and KKRwill also be on the hook, since they'll be held responsible asjoint employers to pay severance claims.

The new legislation could even pressure companies to try to makethings work differently, rather than simply shedding workers.Eileen Appelbaum, co-director of the Center for Economic and PolicyResearch, commented "that it is currently 'virtually costless' tofire employees as part of a bankruptcy process or when a financialcompany like a private equity firm buys a company and wants toboost profits. 'Squeezing labor is the fastest way to increase cashflow,' she explained."

Appelbaum went on to say in the report that New Jersey's new lawcould "cause companies to think twice about whether laying offworkers is their go-to solution for every problem that they face,"since it would actually cost companies money to fire thoseworkers—perhaps pressuring companies into finding ways to avoidclosing stores and factories and keep people on the job.

Says Cryan, "Finally, workers are added to the bottom-lineequation when corporations look at future business. Workers'performance and workers' dedication to the company were secondary.Now hopefully with this bill they'll be moved more to theforefront."

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