On February 6, 2023, Governor Murphy signed Assembly Bill 1474/S511, commonly referred to as the "Temporary Workers' Bill of Rights." The bill's "equal-pay-equal-benefit" provision requires that temporary workers be paid at least the same average rate of pay and equivalent benefits (or cash equivalent) as the third-party client’s permanent employees performing the same or similar work on jobs that require equal skill, effort, and responsibility. The legislation applies to workers in designated classifications, including certain workers in protective service, food preparation and serving, building, and grounds cleaning and maintenance, personal care and service, construction, production, and transportation occupational categories.
Impact on Temporary Staffing Agencies and Employers Hiring Temporary Employees
In addition to the key provision setting equal pay protections for the covered categories of temporary workers, it further requires:
- At the request of a temporary worker, temporary help service firms must hold daily wages and provide biweekly pay checks to avoid unnecessary check cashing fees that reduce earnings. The bill prohibits pay deductions for meals and equipment that would reduce temporary workers’ pay below minimum wage.
- Temporary help service firms must pay workers for a minimum of four hours when they are assigned to work for a client, but no work is available.
- Prevent a temporary help service firm from interfering with workers’ rights to accept employment with the companies in which they are placed on a temporary basis.
- Firms and third-party clients are prohibited from charging fees to transport temporary workers to their work sites.
- Temporary workers must be provided with information detailing key terms of employment in the workers’ primary languages, such as hours worked and rate of pay.
- Firms must keep certain records of each temporary labor engagement (including the location of the work site, the type and number of hours worked, and the hourly rate) for a period of six years.
- Must promptly provide certain information about the assignment to the staffing firm (no later than seven days following the last day of the work week worked by the temporary laborer) as well as provide a work verification form to each temporary laborer who is contracted to work for a single day.
- Employers also must reimburse staffing firms for wages and related payroll taxes for services performed by temporary workers as per the payment terms of their agreements with the firms.
Finally, the bill forbids temporary help service firms or third-party clients from retaliating against any temporary worker by firing them or treating them unfairly in any other way for exercising their legal rights. Termination or discipline within 90 days of the exercise of rights raises a rebuttable presumption that retaliation has occurred.
To ensure compliance, staffing agencies will be required to register with the New Jersey Department of Labor and Workforce Development (DOL), and third-party employers will be barred from utilizing temporary workers through the use of an unregistered staffing agency. The Division of Consumer Affairs (DCA) will oversee enhanced certification requirements for temporary help service firms. The consequences of the Temporary Workers' Bill of Rights being signed into law are critical for employers and staffing agencies.
It is important to highlight that this law only applies to third-party temporary laborers. This law does not apply to temporary employees who, for example, are placed under an employer’s own payroll.
This law is going to likely cause a number of staffing agencies in the State of New Jersey to go out of business as the loophole around the law is for employers to hire employees directly rather than relying on staffing agencies. The fact that the law requires benefit levels of temporary workers to equal those of an employer’s actual employees is likely to be challenged under ERISA preemption. For more information and assistance to ensure compliance with the passing of the New Jersey Temporary Workers' Bill of Rights, please contact Harris S. Freier, Esq., Partner in firm’s Employment Law & Litigation Practice Group via email here, or 973-533-0777.
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