The second part of the new law begins August 5th and new guidelines came out from the state. Below are some of the important parts of the law and a link if you want to read it in its entirety. Currently there is pending litigation and we will keep you updated as we hear anything.
| Here are the Top Five steps employers must take: |
1) Get ready to verify that partner agencies are certified. The new law requires temporary help service firms to become certified by the Director of the Division of Consumer Affairs within the State Department of Law and Public Safety (the “DCA”) and obtain a surety bond. Employers will be required to verify the certification before entering into a contract with the firm and also on March 1 and September 1 each year. The employer will be able to request to view the proof of valid certification issued by the DCA or will be able to electronically validate a particular agency’s registration on the DCA website. Failure to confirm certification will subject the employer to a civil penalty not to exceed $500 per day of violation. At this time, however, the DCA has not promulgated rules to implement this section of the law and has not yet begun issuing certifications; until those rules are in place and the DCA issues certifications, the certifications and bonds are not required for agencies to make placements. 2) Identify comparator employees and pay rates for equal pay consideration. One of the more controversial provisions of the new law – and the focus of pending litigation challenging the law by various staffing agency interest groups against the State of New Jersey – is that covered temporary laborers cannot be paid less than the average rate of pay and average cost of benefits (or cash equivalent thereof) of “comparator employees” who are regular employees performing the same or substantially similar work at the time of the assignment. The Proposed Rules provide certain guiding principles on how to identify comparator employees, including: *Substantially similar work is a “composite of skill, effort and responsibility” under similar working conditions. In turn, “skill” is measured by experience, ability, education and training; “effort” is physical or mental exertion; and “responsibility” is the degree of accountability and discretion required to perform the job. Working conditions do not include job shifts. *While job titles and job descriptions are relevant to the analysis, functions and duties do not need to be identical to be considered substantially similar and “[o]ccasional, trivial or minor differences in duties that only consume a minimal amount of the employee’s time” will not prevent a determination that the work is similar. *Seniority of a particular employee is not relevant to the determination of whether a temporary laborer is performing substantially similar work to that employee. Rather, employers may only consider years of experience required to do the job in measuring the skill level. *The use of a merit system for compensation also is not to be taken into account in evaluating whether two jobs are substantially similar. *Employers must look to the actual job duties performed during a full work cycle, not just the specific person performing the work at a snap shot period of time. The Proposed Rules also include step-by-step instructions on how to calculate the hourly rate of pay of comparator employees, including when the comparator employee is paid on a salary basis. Under the Proposed Rules, the employer must provide the temporary help service firm at the time of contracting for temporary workers with a list of the hourly rate of pay and cost per hour of benefits for each comparator employee. The temporary help service firm then will use this data to calculate the average hourly rate of pay and average benefits cost per hour, add these two rates together, and subtract the cost per hour of benefits provided by the firm to determine the hourly rate of pay for the temporary laborer on that assignment. Although the calculation is being done by the temporary help service firm, the employer and the agency have joint and several liability for any pay equity violation. 3) Prepare to maintain time records and provide required notifications to the agency and to day workers. Third party clients are required to maintain and provide certain information regarding the assignment to the agency not later than seven business days following the last day of the final work week by the temporary laborer, specifically under the Proposed Rules: (i) the name, address and telephone number of each worksite to which the temporary laborer was sent and the date on which they were sent to each worksite; (ii) the name and nature of the work performed by the temporary laborer; (iii) the number of hours worked; and (iv) the hourly rate of pay. Failure to maintain and remit such records is a violation of act subject to civil penalty up to $500 per violation; exception is made under the Proposed Rules where the client has not submitted time records “for reasons beyond its control.” For any worker contracted to work single day, employers must provide a “work verification form” at the end of the work day containing the date, name of the worker, name and address of the work location, and start/end time and total hours worked for that day. The NJDOL is expected to issue a form for this purpose. Once the form is available, failure to provide it to day workers subjects the company to a civil penalty of up to $500 per violation for the first failure and $2,500 for each subsequent violation, with each worker and each day constituting a separate violation. Temporary help service firms also are required to provide itemized statements of pay which include information on the third party clients, number of hours worked, rates of pay, total earnings and any deductions. 4) Confirm that laborers are not being charged for prohibited items and staffing firms are being properly reimbursed. Under the new law, neither the agency nor the third party client may charge laborers for various items associated with the assignment, including drug tests, consumer reports, criminal background checks, transportation to the worksite, and check cashing. In addition, the third party client is required to reimburse a temporary help service firm wages and related payroll taxes for services performed for a third party client by a temporary laborer in a designated classification placement in accordance with the payment terms outlined on invoices, service agreements, or stated terms provided by the temporary help service firm. Employers should confirm that they are not improperly charging temporary workers for prohibited items and that they are complying with all payment terms of their contracts with temporary help service firms. 5) Check that agency contracts do not improperly restrict the company’s ability to hire impacted workers as regular employees. As of August 5, temporary help service firms may not restrict the rights of temporary laborers to accept permanent positions with their third party clients, restrict the right of the third party clients to offer employment to temporary laborers placed with them by the firms, or restrict the right of temporary laborers to accept permanent positions for any other employment. A temporary help service firm may charge a placement fee to a third party client for employing a temporary laborer placed with it by the firm, but there is a cap on such fee. Specifically, the fee cannot exceed the equivalent of the total daily commission rate the firm would have received over a 60-day period, reduced by the equivalent of the daily commission rate the firm would have received for each day the temporary laborer has performed work for the firm in the preceding 12 months. The Proposed Rules provided a method of calculation of the maximum placement fee that may be charged. Any more restrictive terms relating to hiring temporary workers should be removed from staffing contracts. As a reminder, since May 7, 2023, the law has protected temporary workers from retaliation by agencies or their clients for exercising rights under the Temporary Workers’ Bill of Rights. Any termination or discipline within 90 days of protected activity raises a rebuttable presumption of retaliation. Employers should review any termination or discipline of temporary workers to ensure it is not related to the exercise of rights under the new law. As of August 5, 2023, temporary workers who have suffered harm from a violation of the new law, including retaliation, have a private right to sue for monetary damages and/or reinstatement.