Bed Bath & Beyond will reportedly pay severance to 1,293 workers in New Jersey after it faced sharp criticism over prior cuts

Bed Bath & Beyond shopping carts outside a store
A new law in New Jersey that took effect on April 10 requires large employers to pay severance to more employees than is required under federal law.Dominick Reuter/Insider
  • Bed Bath & Beyond will cut another 1,293 jobs in its home state of New Jersey, public records show.

  • New rules in the state mean the company will need to pay severance to those employees.

  • State Senator Joe Cryan — a vocal critic — told local media he has not heard of any "non-compliance."

Another group of Bed Bath & Beyond employees in New Jersey will lose their jobs as the company winds down, and it appears these workers will be getting mandatory severance payments from the bankrupt retailer, unlike colleagues who were laid off in previous rounds.

A state lawmaker told local media the company appears to be complying with new rules in its home state of New Jersey that require it to pay severance to nearly 1,300 workers there who will lose their jobs on June 26.

State Senator Joe Cryan, the representative for the township where the national housewares giant is headquartered and a vocal critic of the company's layoff approach, told his team hasn't received any indication of "any non-compliance."

Public figures including Cryan and the editorial board of Newark's Star-Ledger sharply criticized Bed Bath & Beyond after Insider reported that an earlier batch of layoffs would be complete a single day before the severance law kicked in – potentially saving the company millions of dollars in obligations.

It is unclear whether the nearly 1,300 workers who were terminated before April 10 will receive any payments, given that the company is not legally required to pay and is now navigating bankruptcy.

Former store manager Bob Burke, whose location in New Jersey closed on April 8, told Insider he is "devastated" by the move that is likely to leave former employees like him with nothing, since their wave of terminations was completed before the rules changed.

"It's really, really unfair," Burke said.

A company spokesperson did not immediately respond to Insider's request for comment on the matter.

Cryan sponsored legislation, which took effect on April 10, requiring large employers to pay severance to more employees than is required under federal law.

New Jersey law broadens severance coverage

Mark Diana, a management-side employment lawyer with Ogletree Deakins, previously told Insider the new law requires employers to:

  • Give 90 days' notice of a mass layoff.

  • Cover all part-time and full-time workers across all locations in the state.

  • Pay mandatory severance of one week's earnings per year of service, with no cap on the number of weeks.

The law was drafted following the collapse of Toys R Us and was specifically designed to address large retail companies that employ many workers across several locations. Most retail employees are not covered under current federal layoff rules.

Prior to the bankruptcy announcement, several sources told Insider the company was providing $500 retention bonuses— roughly equal to one week's pay — to encourage employees to stay on the job until their store closes.

Bed Bath & Beyond plans to close its doors for the last time on June 30, per filings with bankruptcy court in New Jersey.

Read the original article on Business Insider