Health care entities, home health care agencies, and staffing registries considering a transaction in New Jersey will need to keep in mind new obligations to certain employees. On Aug. 18, Gov. Phil Murphy signed into law Senate Bill 315, which created broad protections for many employees in the health care sector in the event of a change in control.

The law requires any change in control to be made pursuant to a contract or agreement between the parties that preserves the wages, benefits, and employment status of eligible employees.

The law covers all health care facilities licensed under N.J.S.A. 26:211-1 et seq., which include general hospitals, diagnostic centers, treatment centers, rehabilitation centers, skilled nursing homes, nursing homes, outpatient clinics, home health care agencies and residential health care facilities. It also covers staffing registries and home care services agencies defined under N.J.S.A. 45:11-23.

The phrase "change in control" is defined broadly to include any transaction involving a sale or transfer of all of the assets used in a health care entity's operations or of a controlling interest in such entity. It also includes any event or sequence of events, such as a purchase, sale, or termination of a management contract or lease, that causes the identity of the employer to change. A change in control does not include a transaction in which both parties involved are government entities.

The law protects all current employees at an affected...

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