Temporary staffing agencies in Illinois and their client companies are coming to terms with a new law that will significantly impact the cost of recruiting and hiring temporary workers. In late September, Gov. Bruce Rauner signed into law the Responsible Job Creation Act (the “Act”), or HB 690, which amends the state’s existing Day and Temporary Labor Services Act. The new law, designed to increase protections for temporary workers, includes thirty provisions that toughen or impose new staffing industry regulations. Altogether, it will impact the hiring and wages of the state’s nearly 850,000 temporary workers and may affect how other states across the nation elect to regulate their own staffing industries.
Starting June 1, 2018, the Act imposes stricter written disclosure and paperwork requirements. Staffing agencies must give notice to temporary workers or day laborers in writing, at the time of dispatch, regarding, among other things, the job’s required equipment, training, and protective clothing; amount of wages being offered; transportation requirements; and name and destination of worksite. At the end of the workday, the client company – rather than the staffing agency – must provide each worker with a work verification form that “shall contain the date, the day or temporary laborer’s name, the work location, and the hours worked on that day.” Failure to do so can subject the client company to civil penalties.
The Act aims to eliminate pay differentials between temporary and permanent workers. Under the new law, temporary workers now must receive the same wages and benefits as individuals hired directly by a client company, and those wages and any deductions must be detailed by the agency in an itemized statement of wages. Furthermore, the total amount of deductions may not cause a temporary worker’s hourly wage to fall below the state or federal minimum wage. If a temporary worker contracted by a staffing agency is ultimately not utilized by a client company, the staffing agency will be required to cover the worker’s agreed-upon wages.
Under the Act, staffing agencies must register with the Illinois Department of Labor and must record and report the race and gender of all job applicants directly to it. Failure to do so can result in penalties of up to $500 per violation. The Act now prohibits staffing agencies and their client companies from charging each worker for background checks, drug tests, credit reports, transportation to and from the jobsite, and for cashing paychecks. Furthermore, to curb the practice of “perma-temping,” the Act also imposes an obligation on staffing agencies to attempt to place temporary workers into permanent positions with client companies as they become available. Enforcement will fall upon the Illinois Department of Labor, which shall adopt rules for violation hearings and penalties for violations of the Act or its own rules in conjunction with the penalties set forth under the Act.
This new legislation highlights a growing scrutiny upon how staffing agencies and client companies balance the needs of temporary workers with today’s changing economic landscape. As these new regulations influence the industry across the nation, Frantz Ward LLP’s Staffing Industry attorneys can help you manage future developments.