New Jersey’s latest idiotic proposed law: mandatory severance!

By Matt Rooney
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The 2018-2019 legislative session wrapped up on Monday, Save Jerseyans, and a flurry of bills were signed into law (or allowed to die on the vine). One of the new laws expected to be enacted by Governor Phil Murphy is also one of the most profoundly stupid, anti-business Trenton interventions in the free market to date.

The basics: it may soon be illegal for a private New Jersey business – with at least 50 employees – to lay off 50 or more employees at once WITHOUT offering severance pay.

Henceforth, businesses with 50 or more employees would need to offer at least one week’s worth of severance pay. S3170/A5145 is a product of high-level layoffs at companies including Sears, Payless, and most recently Toys R Us, all of whom had large presences in New Jersey.

Advocates hope companies will think twice before laying off workers to make a quick buck.

In reality?

This is just another law/regulation/mandate which will make businesses think twice about staying in – or coming to – the Garden State to set up shop. The market isn’t moral or immoral. Businesses go where businesses can prosper. By focusing on control outcomes instead of safeguarding opportunities to prosper, Trenton’s behavior continues to be 100% self-defeating.

Toys R Us went bankrupt because it’s business model wasn’t keeping up with the newly-established online marketplace. Many other companies enter bankruptcy and lay off employees to restructure themselves and avoid a complete collapse. Regulating severance makes it harder for companies to make the adjustments they need to save struggling companies – and the jobs they provide – in the long run.

There’s a reason why New Jersey is hemorrhaging revenue at the moment; bills like this are it!