Governor Pritzker signs bill Amending the Day and Temporary Labor Services Act
On Friday, August 4, 2023, Governor Pritzker signed HB2862, which amends the Day and Temporary Labor Services Act. Originally passed on May 19, 2023, both Houses of the Illinois General Assembly, the bill was sent to the Governor with an effective date that is the later of July 1, 2023, or the date it is signed by the Governor – meaning that as of August 4, 2023, this amended Act is law in Illinois. On August 7, 2023, he Department of Labor filed Emergency Rules and Proposed Permanent Rules to implement the bill amending the Day and Temporary Labor Services Act.
The Illinois Day and Temporary Labor Services Act
The Day and Temporary Labor Services Act was originally enacted to add protections for day and temporary workers employed by day and temporary labor service agencies (aka staffing agencies). The new bill does not make any changes to the definition of “day and temporary workers”, “day and temporary labor service agencies” or “Third party client”
- “day and temporary labor” remains defined as “work performed by a day or temporary laborer at a third-party client, the duration of which may be specific or undefined, pursuant to a contract or understanding between the day and temporary labor service agency and the third party client.” The exclusion for work “of a professional or clerical nature” also remains unchanged.
- “Day and temporary labor service agency” means any person or entity engaged in the business of employing day or temporary laborers to provide services, for a fee, to or for any third party client pursuant to a contract with the day and temporary labor service agency and the third party client.
- “Third party client” means any person that contracts with a day and temporary labor service agency for obtaining day or temporary laborers.
Amendment to Illinois Day and Temporary Labor Services Act
The bill does make significant changes to the Act that will impact both staffing agencies that employ day or temporary laborers and the clients who engage their services, among those changes, the amended Act:
- Equal pay for equal work
The amended act requires that laborers assigned to a third-party client for more than 90 calendar days must be paid not less than “the rate of pay and equivalent benefits as 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 on jobs the performance of which requires substantially similar skill, effort, and responsibility, and that are performed under similar working conditions.”
The Act goes on to say “If there is not a directly hired comparative employee of the third party client, the day or temporary laborer shall be paid not less than the rate of pay and equivalent benefits of the lowest paid direct hired employee of the company with the closest level of seniority at the company”
It’s important to note that the term “equal pay” includes both “the rate of pay and equivalent benefits.” However, staffing companies “may pay the hourly cash equivalent of the actual cost benefits in lieu of benefits required.” This would require the client to share information about the benefits it provides and the value of those benefits.
Generally, the client would be in possession of much of the information needed to make these assessments, and under the Act clients are “obligated to timely provide” the staffing agency “with all necessary information related to job duties, pay, and benefits of directly hired employees necessary” for the staffing agency to comply. A client who fails to provide the information has committed a “notice violation” for which it may be liable for compensatory damages and penalties.
This requirement is not without its challenges. The Act does not explain what “benefits” are included. Are all benefits of the client included in this calculation or just health and welfare benefits? And what if staffing agencies offer health and welfare benefits to their employees? Hopefully clarity on these points will be provided guidance from the Department of Labor.
- Right to refuse assignment to a labor dispute
The amended Act requires a notice be provided to laborers when the assignment is to “a place where a strike, a lockout, or other labor trouble exists.” The notice must:
- be provided at or before the time of dispatch;
- must be in writing and in a language that the day and temporary laborer understands; and
- include a statement that a labor dispute exists at the site where they are being assigned and the day or temporary laborer has the right to refuse the assignment without prejudice to receiving another assignment.
If the service agency chooses to send these notices electronically, then the Act goes on to say that the burden of showing the notice was provided falls to the service agency. The Act does not elaborate on what might be considered “other labor trouble” so careful consideration is needed when a notice may be required.
- Safety and Health Practices: Staffing Agencies.
The Act imposes new requirement on staffing agencies to inquire about the client company’s safety and health practices and hazards at the client workplace where the day or temporary laborer will be working, advise the client of any existing job hazards, provide training to its laborers placed on assignment, and provide information about the training to its client. This may include visiting worksites to observe and confirm the client’s training, and to obtain information about the job tasks, safety and health practices, and hazards at the site.
- Safety and Health Practices: Third-Party Client.
The Act also imposes obligations on clients. Before any laborer begins work, the client must “document and inform” the staffing agency of any anticipated job hazards and review the safety training that the staffing agency provided. The client must provide its own “specific training tailored to the particular hazards” at its worksite, document and maintain records of the training, and provide confirmation to the staffing agency within three days that the training was completed.
If the job tasks or work location change and new hazards are presented, then the client must inform both the staffing agency and the laborer, then provide new training and personal protective equipment before the new work begins.
- Increased Fees
The previous version of the Act limited penalties and fees charged to staffing agencies and clients who commit notice violations to a maximum of $500 per violation. The amended Act provides for fees of “not less than $100 and not more than $1,500” for each violation. Fees for subsequent violations were also increased to not less than $500 and not more than $7,500.
- New Term “Interested Party”
The amendment adds a new definition for Interested Parties (meaning “an organization that monitors or is attentive to compliance with public or worker safety laws, wage and hour requirements, or other statutory requirements) and gives these third-party organizations the ability to file civil actions to enforce compliance with the Act.
Proposed Permanent Rules
The Secretary of State Index Department published Proposed Permanent Rules on August 18, 2023, which means the 45-day minimum public comment period for the Proposed Permanent Rules will run through October 2.
The amended Day and Temporary Labor Services Act will create a significant impact on both staffing agencies and their clients alike with a number of new obligations going into immediate effect. This article is intended to be a general introduction to the amended Act and only touches generally on these obligations.
If you have questions about how the amended Act may impact your business or other employment law needs, contact Navigant Law Group, LLC at (847) 253-8800 or email us at email@example.com.
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