New Jersey has joined other states, including California, Illinois, and Massachusetts, in enacting statewide temporary worker protection legislation.
Signed into law by New Jersey Governor Phil Murphy on February 6, 2023, A1474/S511, commonly referred to as the "Temporary Workers’ Bill of Rights” (the “Law”), provides a broad range of protections for temporary workers, requires employers and temporary worker placement agencies to notify temporary workers of various information about each job assignment, and, notably, requires equal pay and benefits for temporary workers and the principal employer’s employees performing the same or substantially similar job functions at each work location. The Law becomes effective August 5, 2023—i.e., 180 days after signing, except for the notification requirements and the prohibition on retaliation, which become effective May 7, 2023—i.e., 90 days after signing.
Who Is Covered?
The Law covers “temporary laborers,” who include all people who contract for employment with a temporary help service firm “in a designated classification placement,” excluding agricultural crew leaders who are registered under the Federal Migrant and Seasonal Agricultural Worker Protection Act. A “designated classification placement” is defined as any of the following occupational categories under the North American Industry Classification System (NAICS) (as designated by the Bureau of Labor Statistics (BLS) of the U.S. Department of Labor):
- Other Protective Service Workers (Miscellaneous Manufacturers) (33-90000);
- Food Preparation and Serving Related Occupations (35-0000);
- Building and Grounds Cleaning and Maintenance Occupations (37-0000);
- Personal Care and Service Occupations (39-0000);
- Construction Laborers (47-2060);
- Helpers, Construction Trades (47-30000);
- Installation, Maintenance, and Repair Occupations (49-0000);
- Production Occupations (51-0000);
- Transportation and Material Moving Occupations (53-0000); or
- Any successor categories as the BLS may designate.
As stated above, for the Law to apply, the temporary laborer must contract for employment with a temporary help service firm. The Law defines “temporary help service firm” as “any person or entity who operates a business which consists of employing individuals directly or indirectly for the purpose of assigning the employed individuals to assist the firm's customers in the handling of the customers' temporary, excess or special work loads . . . .”
Additionally, various provisions of the Law apply to “third party clients” of temporary help service firms. A “third party client” is defined as “any person who contracts with a temporary help service firm for obtaining temporary laborers in a designated classification placement.” However, the Law exempts “the State or any office, department, division, bureau, board, commission, agency, or political subdivision” from this definition.
How Must a Temporary Laborer Be Notified?
Prior to an assignment, the temporary help service firm must provide fairly detailed information to the temporary laborer, including, among other things, information about the temporary help service firm, the worksite employer, the nature of the assignment, and the wages and benefits to which they will be entitled during the assignment. The written statement must be provided to the temporary laborer in English as well as the temporary laborer’s primary language.
The Law also contains notice requirements in the event of a change in a temporary laborer’s schedule, shift, or location and requires that the temporary help service firm provide notice of the change at least 48 hours in advance unless the firm can show that such advance notice was impossible. No temporary help service firm is permitted to send a temporary laborer to a worksite where a strike, lockout, or other labor dispute exists without first providing notice to the temporary laborer and giving the temporary laborer the opportunity to refuse the assignment.
What Records Must Be Kept?
A temporary help service firm must also keep detailed records of certain information whenever it sends at least one temporary laborer to a worksite, including contact information about the third party client, assignment and qualifications list, any applicable contracts, pay data, and any other information requested by the Commissioner of Labor and Workforce Development (the “Commissioner”). The temporary help service firm must maintain these records for at least six years from their creation and make same available for review by the Commissioner, by the temporary laborer, or by an authorized representative of such laborer.
A third party client is responsible for providing the name and address of the temporary laborer, the location where the temporary laborer was sent to work, what work was performed, how many hours were worked, the hourly rate of pay for the work, and the date the worker was sent. This information must be sent to the temporary help service firm no later than seven days after the last day of the workweek during which each temporary laborer worked. Failure to maintain and produce these time records to the temporary help service firm will violate the Law and subject the third party client to the Law’s newly created private right of action unless the third party client has been prevented from producing such records for reasons beyond its control. These notification requirements become effective May 7, 2023.
Will Wage Payment Change?
Temporary help service firms must, at the request of a temporary laborer, hold daily wages and make biweekly payments either by a single check or, if the temporary laborer so chooses, by direct deposit. If a temporary laborer is contracted to work at a third party client’s location but is not utilized, they must be paid by the temporary help service firm for a minimum of four hours at the agreed-upon rate of pay. However, if an assignment at another location can be found during the same shift, that minimum is lowered to two hours at the agreed-upon rate. Furthermore, although temporary help service firms are permitted to withhold or divert wages for meals and equipment, under no circumstances may third party clients otherwise withhold or divert wages. Additionally, the Law prohibits both temporary help service firms and third party clients from charging any temporary laborer the expense of conducting any “consumer report,” as defined in the Fair Credit Reporting Act.
The Law further requires that a temporary help service firm must provide each temporary laborer with an annual earnings summary no later than February 1 of each year and must notify temporary laborers that such earnings summary is available or, in the alternative, post a conspicuous notice in a public reception area.
One of the most notable provisions of the Law prohibits paying temporary laborers less than the “average rate of pay and average cost of benefits, or the cash equivalent thereof, of employees of the third party client” as long as the temporary laborer is “performing the same or substantially similar work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions.” This will first require a designation of what work is the same or at least substantially similar, a calculation of the average rate of pay of the employees performing that work, and then also a calculation of the average cost of the benefits each of those employees receive. Compliance with this wage payment provision is likely to be time-consuming, requiring large amounts of communication between a temporary help service firm and a third party client to determine this information. It also may result in a third party client incurring greater expense for utilizing temporary laborers than persons it employs directly, given that the client will generally be obligated to pay the service firm an hourly rate that is greater than the temporary laborer’s hourly compensation and benefits. If a temporary help service firm violates this requirement, third party clients that lease or contract with them are jointly and severally liable and therefore subject to a civil penalty not to exceed $5,000, in addition to relief that may be provided under the newly created private right of action, discussed below.
What Requirements Are Imposed on Entities That Rely on Temporary Staffing Agencies?
A third party client is prohibited from contracting with a temporary help service firm that is not certified by the state of New Jersey. Prior to contracting, a third party client is responsible for verifying that a temporary help service firm is properly certified. To aid in this requirement, a temporary help service firm must provide proof of valid certification at the time of entering into any contract with a third party client, which the third party client must verify on March 1 and September 1 of each year. Furthermore, if a temporary help service firm loses its certification or has its certification suspended, it must notify third party clients within 24 hours, and all contracts will be null and void from the time the suspension or revocation becomes effective.
The Law also requires that, for each temporary laborer who is contracted to work a single day, the third party client must provide the worker with a work verification form at the end of each day. This form must include the date, the individual’s name, the work location, and the number of hours worked on that day. Failure to do so will result in a civil penalty for the third party client not to exceed $500 for each violation, but the penalty will increase to $2,500 for second and subsequent violations. Notably, a violation of this requirement for each temporary laborer will constitute a separate violation, and each day the violation continues will constitute a distinct violation.
Although wages are to be paid to the temporary laborer by the temporary help service firm, the third party client is required to reimburse the temporary help service firm for wages and related payroll taxes for the services performed by the temporary laborer. These reimbursements are to be made according to the terms “outlined on invoiced, service agreements, or stated terms provided by the temporary help service firm.” Failure to do so will subject the third party client to the Law’s newly created private right of action.
New Enforcement Provisions?
The Law provides for steep penalties if a temporary help service firm or a third party client is found to have retaliated against a temporary laborer for exercising their rights under the Law. In cases of unlawful retaliation, the Law provides for “the greater of all legal or equitable relief as may be appropriate or liquidated damages equal to $20,000 per incident of retaliation.” There is a presumption of retaliation if a temporary laborer is fired or disciplined within 90 days of exercising their rights. Additionally, a party bringing a private right of action may be entitled to attorney’s fees. The prohibition on retaliation becomes effective May 7, 2023, or 90 days after the Law’s enactment.
Private Right of Action
The Law provides that a person aggrieved by any violation of the Law may institute a civil action against either the temporary help service firm or the third party client. This right of action is not limited to individuals, as a temporary help service firm may also institute an action if it is aggrieved by the third party client it contracts to do business with. The Law provides a six-year statute of limitations from the final date of employment by the temporary help service firm in the case of an individual exercising their right of action. If a temporary help service firm is bringing an action against the third party client, a similar six-year statute of limitations exists from the date of the termination of the existing contract between the temporary help service firm and the third party client.
What New Jersey Employers Should Do Now
The requirements of the Law applicable to third party clients will take effect on August 5, 2023; however, the notification requirements and the prohibition on retaliation become effective on May 7, 2023. In the meantime, employers should do the following if they currently contract or are planning to contract with temporary help service firms for the provision of temporary laborers:
- Ensure that the temporary help service firms contracted with are aware of the Law and are taking steps toward state certification.
- Confirm that information required under the Law’s notification and recordkeeping provisions is readily available for transmission to a temporary help service firm upon request.
- Review wage payment and practices to ensure that, as of August 5, 2023, temporary laborers will be paid similarly to employees performing substantially similar job functions.
- Review and update temporary agency contracts.
- Update employment policies to ensure compliance with the Law.
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