Michigan House unanimously approves bill aiming to limit employee severance pay, require disclosure of some payouts

(The Center Square) – The Michigan House on Tuesday unanimously approved legislation aiming to limit the amount of severance pay to a state employee or officer and require disclosure of certain public employment contracts.

House Bill 4591, if passed by the Senate and signed into law, would prohibit the state from gifting severance pay greater than that equal to 12 weeks of the state employee’s normal wages.

“Prudent use of taxpayer money shouldn’t be a partisan issue,” Rep. John Roth, R-Travis City, said in a floor speech.

The bill also seeks to prohibit state employee from disclosing:

Factual information about an alleged violation of law, including discrimination and sexual harassment, in a workplace.The existence of the employment contractThe full text, or any portion, of the employment contract

However, there’s an exception if the attorney general or a legal counsel determines severance pay greater than 12 weeks of the employee’s normal wages is necessary to serve the state’s best interests based on litigation risk and the need to minimize spending taxpayer money.

The state could enter into an employment contract that provides for a greater amount of severance pay if the contract releases, to the extent allowed by law, all claims the employee may have against the state.

Under the bill, if the state enters into a contract providing the state employee severance pay greater or equal to six weeks of normal wages, the public body employing the employee must publicly share the entire employment contract on the its website within 28 days after the employment contract is entered into and to the extent allowed by law.

The nonpartisan House Fiscal Agency said the bill would reduce state costs by an indeterminate amount. If the bill required hiring an additional attorney in the Attorney General’s office, that could cost approximately $200,000.

The bill follows in March when reporters exposed three secret severance packages within 48 hours from Gov. Gretchen Whitmer’s administration costing taxpayers $252,978, even though two confidentiality agreements initially muddied reasons for the payouts.

Former state health director Robert Gordon abruptly resigned in January because he wanted to keep indoor dining restrictions on restaurants contradicting Whitmer, even though there had already been an indoor dining ban for 75 days. So Gordon resigned and scored a $155,506-taxpayer-funded payout equal to nine months of Gordon’s annual salary and health benefits. Gordon’s Deputy Director Sarah Etsy was paid roughly $11,600.

Unemployment Insurance Agency Director Gray resigned Nov. 5 after months of record jobless claims. Still, Gray’s secret taxpayer-funded payout was $85,872. The payout is stipulated in an agreement in which he and the state are required to “maintain confidentiality” regarding his employment and departure.

Disclaimer: This content is distributed by The Center Square