By SCOTT CRUZ
Greensfelder, Hemker & Gale, P.C.
On Aug. 4, 2023, Governor J.B. Pritzker signed into law amendments to the Day and Temporary Labor Services Act (the Act), which governs staffing companies and their third-party clients. The amendments became effective immediately.
On Aug. 7, 2023, the Illinois Department of Labor (IDOL) filed emergency rules (effective immediately) and proposed permanent rules to implement the amendments. The emergency rules are in place for at least 150 days, or once the proposed permanent rules are adopted, following a 45-day public comment period set to expire on Oct. 2, 2023, whichever comes first.
Laborers’ right to refuse a placement if there is a labor dispute
Staffing companies cannot send a laborer to a client’s workplace if there is “a strike, a lockout, or other labor dispute” occurring at the time of the placement, unless the staffing company provides the laborer with appropriate notice in writing at or before the time of placement and in a language the laborer understands. The notice must inform the laborer of the labor dispute and the right to refuse that assignment without prejudice to receiving another assignment. “Labor dispute” means “any controversy concerning wages, hours, terms or conditions of employment.” Clients must notify a staffing agency if a labor dispute exists at the location where the laborer is or will be working.
Equal pay for equal work
Upon request from a staffing company, the client to which the laborer has been assigned for more than 90 calendar days within any 12-month period (consecutively or intermittently) is required to timely provide the staffing company with all necessary information related to job duties, pay, and benefits of a comparable directly hired employee of the client. This is necessary for the staffing company to comply with the Act’s requirements of paying that laborer not less than the rate of pay and equivalent benefits as the client’s lowest-paid directly hired employee who has the same level of seniority and is performing the same or substantially similar work on jobs requiring substantially similar skill, effort, and responsibility under similar working conditions.
Ninety calendar days means days the laborer actually goes to the client’s worksite to work. “Benefits” means health care, vision, dental, life insurance, retirement, leave (paid and unpaid), other similar employee benefits, and other employee benefits as required by state and federal law. A staffing company may pay the hourly cash equivalent of the actual cost benefits in lieu of providing the benefits, unless prohibited by state or federal law. If there is no comparable employee, the staffing company must pay the laborer not less than the rate of pay and equivalent benefits of the client’s lowest-paid directly hired employee with the closest level of seniority to the laborer.
Safety, health practice and hazard disclosures, and training responsibilities
Prior to a laborer going to a client’s worksite, the client must notify the staffing company of all its safety and health practices and disclose all known hazards at the worksite. This is necessary because the staffing company is required to provide safety training before a laborer’s first day at a client’s worksite. The training has to cover all existing job hazards at the worksite known to the client or the staffing company. Clients also are required to provide training to the laborers tailored to the particular hazards at the worksite and their tasks.
Increased fees and penalties
Staffing companies and their clients are subject to civil penalties between $100 and $18,000 for violations, and between $250 and $7,500 for each repeat violation. Each violation constitutes a separate and distinct violation for each day the violation continues or for each laborer who is aggrieved.
Civil litigation initiated by an ‘interested party’
There is now a private right of action for any “interested parties” who have a “reasonable belief” that a staffing company and/or client has violated the Act in the preceding three years. An “interested party” is “an organization that monitors or is attentive to compliance with public or worker safety laws, wage and hour requirements, or other statutory requirements.” Prior to filing a lawsuit, the interested party must first submit a complaint with the IDOL and obtain a notice of right to sue letter. Violations cured at the IDOL stage appear to prohibit an interested party from filing a lawsuit.
Because the amendments change the temporary worker landscape, staffing companies and their clients must take immediate steps to address compliance and should not attempt to navigate these new obligations without assistance of legal counsel. For example, for companies that use temporary labor, under a joint employment theory, they can be legally liable to the laborers if based on the staffing company’s actions, and sued by the laborers in a class action. Most template staffing company agreements are drafted to favor solely the staffing company. Thus, it is strongly recommended that companies have legal counsel review such agreements to reduce risk, limit their liability and provide other benefits that generally are ignored in staffing company template agreements.
Scott Cruz is an Employment & Labor Officer at Greensfelder, Hemker & Gale, P.C. He may be reached at email@example.com.
This story also appears in the September 2023 print edition of the Illinois Business Journal.