Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
On February 6, 2023, New Jersey Governor Phil Murphy signed into law Assembly Bill No. A1474 / S511,1 commonly known as the “Temporary Workers’ Bill of Rights” (the “Bill of Rights”), which establishes numerous labor and employment protections for large portions of New Jersey’s more than one 125,000 temporary workers.
The Bill of Rights’ practical implications are far-reaching, resulting in new requirements of state registration, pay frequency and information, and recordkeeping for covered “temporary help service firms” that employ, directly or indirectly, “temporary laborers” in “designed classification placements.” While compliance with these new requirements will be time-consuming and costly, the Bill of Rights’ penalties provisions are steep and provide strong incentive for employers to ensure compliance.
What is a Temporary Help Service Firm?
Under this new law, “temporary help service firms”’ (commonly referred to as staffing firms or temp agencies) are defined 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 workloads, and who, in addition to the payment of wages or salaries to the employed individuals . . . carries workers’ compensation insurance and pays federal social security and State and federal unemployment insurance taxes.
Who is a Temporary Laborer?
The Bill of Rights defines “Temporary laborer” as a person who contracts for employment in a designated classification placement (see below) with a temporary help service firm.
What is a Designated Classification Placement?
“Designated classification placement” means an assignment of a temporary laborer by a temporary help service firm to perform work in any of the following occupational categories as designated by the U.S. Department of Labor, Bureau of Labor Statistics (BLS):
- 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.
Staffing firms located, operating, or transacting business within New Jersey may not make any designated classification placements unless it is certified by the Director of the Division of Consumer Affairs in the Department of Law and Public Safety or a designee of the Director. The certification process requires the completion of a form to be created by the Director, along with an initial certification fee. Temporary help service firms that fail to obtain a certification run the risk of being suspended and having their entity’s name placed on a public list, similar to debarment for public works contractors that have failed to follow proper procedures.
Changes to Rate of Pay and Pay Frequency for Temporary Laborers
The Bill of Rights requires staffing firms to pay temporary laborers assigned to work for a third-party client the same average rate of pay and equivalent benefits as a permanent employee performing the same or similar work of the third-party client. Additionally, staffing firms or a contract or agent of such, are prohibited from charging a fee to a temporary laborer to transport them to or from the designated work site. With these provisions, employers lose the ability to hire temporary employees for less than their full-time workforce who perform similar job functions. In addition, the Bill of Rights contains no guidance on how to calculate the average rate of pay and equivalent benefits, which will likely lead to confusion and issues with implementation. Despite this lack of clarity, the Bill of Rights contains penalty provisions for failing to pay temporary laborers this equivalent rate.
In addition to new rate-of-pay protections, at the request of a temporary worker, staffing firms must hold daily wages and make biweekly pay checks to avoid unnecessary check-cashing fees that eat away at earnings. The bill also prohibits pay deductions for meals and equipment that would reduce temporary workers’ pay below minimum wage. This new requirement has the potential to create issues for staffing firms as they must now ensure their payroll processes or software are designed for multiple payment cycles. Ensuring all temporary workers are paid pursuant to their request on different payment cycles is necessary to avoid committing wage or overtime payment violations, which would subject staffing firms to the harsh penalties of the New Jersey State Wage and Hour Law2 and the Fair Labor Standards Act.
The Bill of Rights also provides that, whenever a staffing firm agrees to send an individual to work as a temporary laborer, that entity has to provide the temporary laborer a statement (on a form approved by the Commissioner of the Department of Labor and Workforce Development), in English and the language identified by the employee as their primary language. Among other information, the statement must set forth the following:
- The name of the temporary laborer;
- The staffing firm’s workers’ compensation carrier;
- The nature of the work to be performed by the temporary worker and the wages offered;
- Name and address of the assigned worksite of each temporary laborer;
- Whether a meal or equipment are provided and who provides such; and
- The amount of sick leave to which temporary workers are entitled.
Staffing firms will also be required to keep records related to their sending of one or more persons to work as temporary laborers. The records must include:
- Basic contact information of the temporary laborer;
- Specific qualifications or attributes of a temporary laborer;
- Copies of all contracts and employment notices;
- The amounts of any deductions to be made from each temporary laborers’ compensation; and
- Verification of the actual cost of any equipment or meal charged to a temporary laborer.
Further, staffing firms must make records related to the number of hours billed to a third-party client available for review or copying within five days following a written request by the temporary laborer or their authorized representative.
Finally, temporary laborers must be provided a detailed, itemized statement on their paycheck stub or on a form approved by the Commissioner listing certain compensation information including rate of pay, total pay period earnings, and number of hours worked at each third-party client during the pay period.
Enforcement and Potential Penalties
The Bill of Rights makes clear that steep penalties will arise if a staffing firm or third-party client chooses to retaliate against a temporary laborer for exercising their rights under the law. Firing or disciplining a temporary laborer within 90 days of exercising their rights raises a rebuttable presumption of retaliation. Removing this initial burden of proof is likely to result in an increase in litigation against both staffing firms and third-party clients.
Additionally, if a temporary worker alleges unlawful retaliation, they may pursue either the greater of all legal or equitable relief available, or liquidated damages equal to $20,000 per incident of retaliation. The temporary worker may also seek reinstatement, attorneys’ fees and costs.
Lastly, the new law provides individuals with a private right of action in Superior Court if they are aggrieved by a violation of the Bill of Rights.
Understanding the requirements that the Bill of Rights places on staffing agencies and third-party employers is necessary to ensure compliance with the key requirements. Staffing agencies and any employers that utilize the services of temporary workers are strongly advised to consult with counsel on the implications of this new law and how to best navigate the potential hurdles that lie ahead.
1 P.L.2023, c.10, 220th Leg., 2022 Sess. (N.J. 2023).
2 For example, N.J.S.A. 34:11-58(b) states: “An employer found to owe an employee wages shall pay the employee the wages owed plus liquidated damages equal to not more than 200% of the wages owed, exclusive of any costs . . . .”