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New Jersey Governor Phil Murphy recently signed into law the “Temporary Workers’ Bill of Rights” (the “Law”), which provides significant rights and protections for temporary workers, and imposes burdensome obligations on the temporary staffing firms (and their clients) that employ them. Among other things, the Law mandates equal pay for temporary workers performing the same or substantially similar work as the permanent employees of the client for whom they are working, and requires staffing firms to provide advance written notice of specific terms and conditions of their temporary workers’ assignments with the staffing firm’s clients. The Law will undoubtedly have a major impact on the temporary staffing industry in New Jersey going forward.

Who is Covered?

The Law applies to “temporary help service firms” (i.e., temporary staffing firms) with respect to their “temporary laborers” who are contracted to work in a “designated classification placement” with a client of the staffing firm. “Designated classification placement” means an assignment to perform work in any of the following occupational categories designated by the Bureau of Labor Statistics of the United States Department of Labor:

• 33-90000 Other Protective Service Workers;
• 35-0000 Food Preparation and Serving Related Occupations;
• 37-0000 Building and Grounds Cleaning and Maintenance Occupations;
• 39-0000 Personal Care and Service Occupations;
• 47-2060 Construction Laborers;
• 47-30000 Helpers, Construction Trades;
• 49-0000 Installation, Maintenance, and Repair Occupations;
• 51-0000 Production Occupations;
• 53-0000 Transportation and Material Moving Occupations; or
• any successor categories as the Bureau of Labor Statistics may designate.

Accordingly, temporary workers who do not perform work in the foregoing categories are not entitled to the protections of the Law.

Key Provisions of the Law

Equal Pay and Benefits. Staffing firms will need to pay their temporary employees working for a client at least the average rate of pay and the average cost of benefits (or a cash equivalent thereof) as the client’s permanent employees “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.” Such amounts are determined at the time the temporary worker is assigned to work for the client. Notably, the Law provides that the client shall be jointly and severally responsible, with the staffing firm, for any violation of the equal pay and benefits requirements.

Written Notices for Temporary Workers. Staffing firms will need to provide their temporary workers, “at the time of dispatch” (presumably, in advance of the client assignment), a written notice in English and in the worker’s identified primary language, in a form approved by the Commissioner of Labor and Workforce Development (the “Commissioner”), setting forth:

1. the name of the temporary laborer;
2. the name, address, and telephone number of: (a) the temporary help service firm, or the contact information of the firm’s agent facilitating the placement; (b) the firm’s workers’ compensation carrier; (c) the worksite employer or third party client; and (d) the Department of Labor and Workforce Development;
3. the name and nature of the work to be performed;
4. the wages offered;
5. the name and address of the assigned worksite of each temporary laborer;
6. the terms of transportation offered to the temporary laborer, if applicable;
7. a description of the position and whether it shall require any special clothing, protective equipment, and training, and what training and clothing will be provided by the temporary help service firm or the third party client; and any licenses and costs charged to the employee for supplies or training;
8. whether a meal or equipment, or both, are provided, either by the temporary help service firm or the third party client, and the cost of the meal and equipment, if any;
9. for multi-day assignments, the schedule;
10. the length of the assignment, if known; and
11. the amount of sick leave to which temporary workers are entitled under New Jersey’s Earned Sick Leave Law, and the terms of its use.

The Law provides that such notice be provided “in a manner appropriate to whether the assignment is accepted at the temporary help service firm’s office, or remotely by telephone, text, email, or other electronic exchange.” In the event of a change in schedule, shift, or location of a multi-day assignment, the staffing firm must provide at least 48 hours’ advance notice of the change, when possible.

The New Jersey Department of Labor and Workforce Development recently published a template notice – the Temporary Laborer Assignment Notification – that staffing firms can utilize to comply with this notice requirement.

Wage Statements for Temporary Workers. Staffing firms must also provide their temporary workers with a “detailed itemized statement” on the worker’s paystub or on a form approved by the Commissioner, listing the following:

1. the name, address, and telephone number of each third party client at which the temporary laborer worked;
2. the number of hours worked by the temporary laborer at each third party client each day during the pay period;
3. the rate of payment for each hour worked, including any premium rate or bonus;
4. the total pay period earnings;
5. the amount of each deduction made from the temporary laborer’s compensation made by the temporary help service firm, and the purpose for which each deduction was made, including for the temporary laborer’s food, equipment, withheld income tax, withheld Social Security deductions, withheld contributions to the state unemployment compensation trust fund and the state disability benefits trust fund, and every other deduction; the current maximum amount of a placement fee which the temporary help service firm may charge to a third party client to directly hire the temporary laborer; and
6. any additional information required by the Commissioner.

Recordkeeping. Staffing firms must keep the following records for six (6) years:

1. the name, address, and telephone number of the third party client, including each worksite, to which temporary laborers were sent by the temporary help service firm and the date of the transaction;
2. for each temporary laborer: the name and address, the specific location sent to work, the type of work performed, the number of hours worked, the hourly rate of pay, and the date sent. (Note: The third party client is required to remit all information required under this paragraph to the temporary help service firm no later than seven (7) days following the last day of the work week worked by the temporary laborer);
3. the name and title of the individual or individuals at each third party client’s place of business responsible for the transaction;
4. any specific qualifications or attributes of a temporary laborer, requested by each third party client;
5. copies of all contracts, if any, with the third party client and copies of all invoices for the third party client;
6. copies of all written employment notices provided in accordance with the Law;
7. the amounts of any deductions to be made from each temporary laborer’s compensation by either the third party client or by the temporary help service firm for the temporary laborer’s food, equipment, withheld income tax, withheld contributions to the state unemployment compensation trust fund and the state disability benefits trust fund, withheld Social Security deductions, and every other deduction;
8. verification of the actual cost of any equipment or meal charged to a temporary laborer; and
9. any additional information required by the Commissioner.

Direct Employment of Temporary Workers by a Client. Employee agreements between staffing firms and their temporary workers often include limits on the employee’s ability to directly work for a client for a certain limited period of time after the end of the assignment, and staffing agreements between staffing firms and their clients often require the client to pay a fee (e.g., a conversion or placement fee) to the staffing firm in the event the client directly hires a temporary worker. The Law now prohibits staffing firms from restricting a temporary worker from accepting permanent employment with a client of the staffing firm. However, the staffing firm may still charge a placement fee to a client who directly hires the staffing firm’s temporary worker, but such fee cannot exceed “the equivalent of the total daily commission rate the temporary help service firm would have received over a 60-day period, reduced by the equivalent of the daily commission rate the temporary help service firm would have received for each day the temporary laborer has performed work for the temporary help service firm in the preceding 12 months.” We anticipate there will be further guidance from the State to provide clarity on this language and the Law’s limitations on placement fees.

In addition, as alluded to above, if the staffing firm charges a placement fee to its clients for hiring a temporary worker, the staffing firm must disclose on the temporary worker’s wage statement and notice form “the maximum amount of a fee that shall be charged to a third party client by the temporary help service firm, and the total amount of actual charges to the third party client for the temporary laborer during each pay period compared to the total compensation cost for the temporary laborer, including costs of any benefits provided.”

Certification Requirements. New Jersey staffing firms will need to receive certification from the Director of the Division of Consumer Affairs in the Department of Law and Public Safety (the “Director”) to make “designated classification placements” under the Law. Moreover, clients will need to verify with the Director that the staffing firm has the proper certification both (i) before entering into any agreement with the staffing firm for the assignment of temporary workers, and (ii) on March 1^st and September 1^st of each year. It will be unlawful for a staffing firm to operate without the proper certification and unlawful for a client to contract with an uncertified staffing firm.

Anti-Retaliation. The Law contains strict anti-retaliation protections for temporary workers, making it unlawful for a staffing firm, a client, or an agent of either such party, to retaliate against a temporary worker for exercising rights under the Law. There will be a rebuttable presumption of retaliation if a staffing firm takes disciplinary action against a temporary worker within 90 days after the worker exercises rights under the Law.

Private Right of Action. The Law provides temporary workers with a private right of action against a staffing firm or client for violating the Law, without the need to exhaust any alternative administrative remedies. In addition, aggrieved staffing firms have a private right of action against their clients for violations of the Law.

Next Steps

The written notice and anti-retaliation provisions of the Law took effect on May 7, 2023, and the remaining provisions of the law take effect on August 5, 2023.

While we anticipate the State will issue further guidance on the Law, at this time, staffing firms and their clients (i.e., employers utilizing temporary staffing services) should be taking steps to comply with the Law, including by:

• Determining whether temporary workers fall within one of the designated occupational categories covered by the Law.
• Coordinating with one another to ensure compliance with the equal pay and equal benefits requirements of the Law.
• Reviewing staffing services agreements between the staffing firm and client, including direct hire and conversion fee provisions, for compliance with the Law.
• Training mid-level managers and other personnel on the Law’s requirements to help mitigate the risk of claims, particularly for unintended violations of the Law’s anti-retaliation provisions.

While parts of the Law are now in effect, it is worth noting that on May 5, 2023, the New Jersey Staffing Alliance, together with the American Staffing Association and the New Jersey Business and Industry Association, filed suit against the State of New Jersey, the New Jersey Division of Consumer Affairs in the Department of Law and Public Safety, and the New Jersey Department of Labor and Workforce Development in the U.S. District Court for the District of New Jersey, seeking to block the Law. The New York Staffing Association will closely follow this lawsuit and provide noteworthy updates.

For more information on the topic discussed, contact:

• Joel A. Klarreich  |  jak@thsh.com  |  212-508-6747
• Jason B. Klimpl  |  klimpl@thsh.com  |  212-508-7529
• Randi B. May  |  may@thsh.com  |  212-702-3167
• Elizabeth E. Schlissel  |  schlissel@thsh.com  |  212-508-6714
• Andrew W. Singer  |  singer@thsh.com  |  212-508-6723
• Stacey A. Usiak  |  usiak@thsh.com  |  212-702-3158
• Andrew P. Yacyshyn  |  yacyshyn@thsh.com  |  212-508-6792