Columbia Standard

U.S. Senators Dick Durbin and Josh Hawley introduced new bipartisan legislation aimed at protecting employees and retirees when businesses file for bankruptcy. The proposed Protecting Employees and Retirees in Business Bankruptcies Act seeks to address abuses of the bankruptcy process that jeopardize workers' wages, benefits, and retirement savings.

The bill intends to modify Chapter 11 bankruptcy procedures by expanding available claims for employees and retirees and improving their priority. It also targets excessive executive compensations in such reorganization processes.

Senator Dick Durbin highlighted, “When their company files for bankruptcy, employees should not have to worry that they will lose their hard-earned wages, benefits, and retirement savings. The Protecting Employees and Retirees in Business Bankruptcies Act would ensure that all employees, not just C-suite executives, receive the benefits they were promised.”

Josh Hawley, co-sponsor of the bill, commented, “Employees shouldn’t be the ones left holding the bag when companies go under. Rather than giving precedence to the desires of predatory creditors, we should prioritize workers and protect the compensation they’ve earned through years of hard work. Our bill would safeguard workers’ claims to wages, benefits, and retirement funds throughout bankruptcy proceedings.”

Key provisions of the bill include improved recovery measures for employee wages and benefits, strengthened protection of worker rights in bankruptcy, and restrictions on executive compensation. Additionally, it aims to preserve jobs and economically productive activity by focusing the Chapter 11 process on these goals.

Among the co-sponsors of the legislation are Senators Brian Schatz, Tammy Duckworth, and Amy Klobuchar. It has already gained support from multiple organizations, including the International Brotherhood of Teamsters, AFL-CIO, and the Airline Pilots Association.

The introduction of this bill comes amid an increase in business bankruptcy filings, highlighting the need for updated laws that better protect employees and retirees.