Illinois recently passed a new law and implemented emergency regulations to protect day and temporary laborers (collectively “temporary workers”) and require day and temporary labor service agencies (collectively “temporary agencies”) to provide equal pay and equal benefits for their temporary workers. The Illinois law was signed on August 4, 2023, but has a retroactive effective date of July 1, 2023. New Jersey enacted a similar law that went into effect earlier this month. And while it is not the first law of its kind, it will likely significantly impact the temporary employment landscape in Illinois. We expect to see this trend continue in other states.
The Illinois law requires the following:
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Temporary agencies must provide written notice at or before the time of sending a temporary worker to a worksite (in a language that the temporary worker understands) that a strike, lockout or other labor trouble exists at the worksite. The notice must inform the temporary worker of their right to refuse the assignment without prejudice and to receive another assignment.
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Temporary workers assigned to temporary work for a contracted client company (“client company”) more than 90 days calendar days must be paid at least the same rate of pay and receive at least equivalent benefits as either:
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(a) the lowest paid directly hired employee of the third-party client with the same level of seniority at the company and performing the same or substantially similar work (under similar working conditions) on jobs for which substantially similar skill, effort, and responsibility for which the day or temporary laborer is assigned; or
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(b) if there is not a comparable directly hired employee, receive at least the same rate of pay and at least equivalent benefits as the lowest paid direct hired employee of the company with the closest level of seniority. Note: As set forth in the emergency regulations, 90 days is determined within any 12-month period (whether the temporary work is performed consecutively or intermittently).
The temporary agency may pay a cash equivalent of the actual cost of employee benefits in lieu of providing such benefits. The immediately effective emergency regulations enacted by the state to implement the new law define “benefits” to include health care, vision, dental, life insurance, retirement, leave (paid and unpaid) and other similar employee benefits, including those required by state or federal law. Thus, temporary agencies must provide any such benefits (or their hourly cash equivalent) available to client companies’ directly hired comparable employees to the temporary worker.
The regulations clarify that the equal pay for equal work requirements are effective as of the ninety-first day a temporary worker performs work for the client company, and temporary workers’ paychecks must include a calculation of the placement fee that could be charged for the client company to hire the laborer (if applicable) and the number of work days remaining before the agency can no longer charge any client a placement fee to hire that temporary worker.
Further, before temporary workers begin working at a client company’s site, the temporary agency must:
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Inquire about the client company’s health and safety practices and worksite hazards. This may include a site visit to the client company;
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Provide free training to the temporary workers, in their preferred language, regarding any potential industry hazards they may encounter at the client company. Records regarding the training, including date and content, must be maintained by the temporary agency and provided to any day or temporary workers upon request;
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Provide a general description of the training program to client companies at the start of the contract; and
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Provide day or temporary workers with the phone number to call to report safety hazards/concerns and provide them with name/contact information at the client company for reporting any workplace concerns.
The client company must timely provide the day or temporary labor service agency with any necessary pay, benefits and job duties information specific to directly hired employees meeting the requirements related to seniority described above such that the temporary agency can meet its obligations under the law. Further, no later than the day before the temporary worker begins providing services, the client company must:
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Document and inform the temporary agency about any anticipated job hazards;
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Review the safety and health awareness agency to ensure it addresses recognized hazards applicable to client company’s industry;
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Provide specific training applicable to the particular hazards at the client company’s worksite;
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Document and maintain records of site-specific training and provide confirmation of the training to the temporary agency within three business days of providing the training; and
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If job tasks or work location for the day or temporary worker change and new hazards may be encountered, then the client company must inform the agency and the temporary worker of the change, and any job hazards not previously covered before the new tasks are encountered. New personal protective equipment and training must also be provided, as necessary. If the worker has not received appropriate training or the tasks have not been reviewed, the temporary agency or worker may refuse the new job task.
The client company supervising temporary workers must provide worksite specific training and allow the temporary workers’ agency to visit the worksite and observe and confirm the client company’s training and information specific to the jobsite.
The regulations require client companies to maintain the following records available for inspection at every location where laborers are sent to work:
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All records related to all known safety hazards, including documentation of steps the client company has taken to control or mitigate the hazards; and
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Compensation records for all directly hired employees so they can be used for comparison purposes to ensure compliance with the “Equal Pay for Equal Work” requirements.
Additionally, the regulations define key terms to clarify the applicability of the law, lay out the regulatory scheme for interested parties to file complaints, and provide guidance regarding information the state department of labor will consider when assessing any potential penalties for client companies or temporary agencies who have not complied with the law.
Temporary agencies and the client companies with whom they contract can be sued by interested parties for applicable statutory penalties (between $100 and $18,000 for an initial violation, and $250 – $7,500 for each repeat violation) and injunctive relief and may be required to pay prevailing party attorney’s fees if an interested party’s claims are successful. Each violation of the law and each day the violation continues constitutes a separate and distinct violation. Any statutory penalties resulting from a lawsuit filed by interested parties are shared between the interested party (10%) and the state (90%). For these purposes, an “interested party” means an organization that monitors or is attentive to compliance with public or worker safety laws, wage and hour requirements or other statutory requirements. Note: The same penalties apply if an entity is determined to be in violation based on an independent audit by the state.
While New Jersey’s recently enacted regulations implementing a similar law aimed at ensuring temporary workers have access to the same pay and benefits as a client company’s “regular employees”, there are some key differences, including the notice requirements, how comparable pay is determined for temporary workers, and the timeframe within which these requirements are effective for temporary workers (all temporary workers in New Jersey versus those who have completed 90 calendar days of work for a client company in Illinois).
In conclusion, these new laws require significant new training, notice, and compensation adjustments for temporary agencies, and companies that hire temporary workers through temporary agencies in Illinois and New Jersey should familiarize themselves with these requirements, be prepared to make necessary records and worksites available for use or inspection, assess their applicable industry and company safety plans, and prepare to complete any required training for temporary workers.
About the Author. This alert was prepared for Alera Group by Barrow Weatherhead Lent LLP, a national law firm with recognized experts on ERISA and the Affordable Care Act. Contact Stacy Barrow or Nicole Quinn-Gato at sbarrow@marbarlaw.com or nquinngato@marbarlaw.com.
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