LANSING, Mich. — After more than a year of the pandemic, mass layoffs, and store closures across the state, workers are calling for better protections like guaranteed severance pay.
State Rep. Abdullah Hammoud, D – Dearborn, is planning to introduce legislation that would do just that after a major Michigan furniture retailer closed its doors, leaving workers without severance or medical insurance in the midst of the pandemic.
Shirley Smith worked at Art Van Furniture for 23 years and was laid off in March of 2020.
“What they did was wrong. If we just let them walk away with it they’ll think that it’s okay to keep doing this to people,” she said.
Art Van, which was owned by Thomas H Lee Partners, closed all 30 of its Michigan stores.
“There were rumors that the company was failing, we never thought the company was failing because we were still seeing a lot of traffic,” Smith said.
Smith’s layoff created an extra layer of worry because of the high cost to manage her health.
“The severance pay would have been extremely important because I’m diabetic. My prescriptions skyrocketed, I was paying $40 for a 90-day supply [of insulin] with my insurance and now all of a sudden I’m paying $1,500 for a month,” she said.
Hammoud’s legislation would require a company planning mass layoffs or closure to pay its workers for all hours, sick time and holiday pay, plus one week for each year the employee worked.
But the proposed legislation could come with some hurdles, said David Cessante, an unemployment lawyer with Clark Hill Attorneys.
“I’m also not aware of any state that requires severance pay, so it would presumably put Michigan at a competitive disadvantage if an employer in Michigan is required to provide severance pay where employers in Ohio, Indiana, Illinois, some of the surrounding Midwest states would not have to provide severance pay.
Hammoud did not respond to a request for comment.
If passed the new bill would make Michigan only the second state in the U.S to guarantee severance for workers whose companies lay off employees because of scaling back or closure.