Connections Personnel will be monitoring this closely and will update our clients as we receive more information. Below is a good outline of what the bill entails.
On February 6, 2023, Governor Murphy signed new legislation into law significantly expanding the rights of temporary workers. The law, known as the “Temporary Workers’ Bill of Rights” (A1474/S511), is aimed at advancing pay equity, increasing government oversight of temporary staffing agencies, and prohibiting retaliatory conduct against temporary workers. A1475/S511 applies to workers in designated classifications, including protective services, food preparation, construction labor and trade, personal care services, and building, grounds cleaning, and maintenance occupations. The range of protections afforded by the new law, as outlined below, are expansive and will have significant implications on staffing agencies as well as third-party clients who utilize these agencies to place temporary workers.
Equal Pay and Benefits
The most significant protection under the law is the “equal-pay-equal-benefit” provision, which requires that temporary workers be paid the same average compensation rate and benefits (or cash equivalent) that is paid to a permanent employee performing the same or similar work on jobs that require equal skill, effort, and responsibility. Notably, staffing agencies must pay temporary workers a minimum of four (4) hours at the agreed upon rate for work assigned even if there is no work available upon the temporary worker’s arrival at the employer’s worksite.
Unfortunately, the law does not address the fact that enrollment or participation in health or retirement plans are governed by the terms of employer benefit plans for which temporary workers generally do not qualify. Additionally, the law does not address those plans that fall under the federal Employee Retirement Income Security Act (“ERISA”), thereby raising viable preemption concerns. We anticipate that future regulations or litigation will help to resolve these outstanding issues.
Notice and Record-Keeping Requirements and Prohibitions
Staffing agencies will be required to provide temporary workers with written notice (in both English and in the worker’s primary language) of key terms of the assignment, including the rate of pay, how much sick time the worker will receive, what type of work will be performed, and the length of assignment. Staffing agencies must keep records of each temporary assignment, including the location of the work site, the type and number of hours worked, and the hourly rate, for a period of six (6) years.
The law prohibits staffing agencies from deducting certain fees from the workers’ paychecks, including deductions for meals and equipment, and from charging fees to transport workers to their work sites. Additionally, the law forbids staffing agencies from restricting the right of a temporary worker to accept a position with a third-party client to whom the worker was assigned or from accepting any other employment. Retaliation against any worker for exercising their rights under this law is also prohibited.
Registration Requirements and Penalties
To ensure compliance, staffing agencies will need to register with the New Jersey Department of Labor whose certification requirements will be overseen by the Division of Consumer Affairs (“DCA”). Third-party clients are barred from utilizing temporary workers through staffing agencies that fail to register or are deemed disqualified by the DCA.
The law’s notice requirements and anti-retaliation provisions will take effect on May 7, 2023. The remaining provisions become effective on August 5, 2023. Failure to comply with the new requirements may result in penalties up to $5,000.00 per day, per violation. Individuals aggrieved by a violation under the new law may bring a private cause of action for both damages and attorneys’ fees.
Staffing agencies and third-party clients that utilize these agencies to place temporary workers should review their service agreements to ensure compliance with this new law, particularly the notice and pay/benefit requirements. With respect to the latter, third-party clients should also review their benefit policies in an effort to determine whether temporary workers are eligible to receive benefits under those plans. If benefits are not available, the employer should attempt to calculate and provide the temporary worker with the cash equivalent to those benefits.
We will continue to monitor this law closely for additional regulations and guidance