IMMEDIATE EXTENSIVE CHANGES TO ILLINOIS’ DAY & TEMPORARY LABOR SERVICES ACT

On August 4, 2023, Governor Pritzker signed into law extensive amendments to The Day and Temporary Labor Services Act (Act). They were immediately effective, but the Illinois Department of Labor (Department) has not yet promulgated any guidance or instructions.

As a result of the amendments, the Act increased penalties, imposed new notice requirements and heightened protections for laborers. Most significantly, temporary workers assigned to a client job site for 90 days or longer will be entitled to receive the same pay and benefits from their staffing companies as workers directly hired by the client company. Temporary workers will also be permitted to refuse assignments at job sites experiencing strikes, lockdowns or other “labor troubles.” Further, temporary workers will be advised of safety hazards present at the job site and will receive training specific to the job site.

Adding to these protections, Illinois has empowered “interested parties,” organizations that monitor workplace safety, wage and hour requirements and other statutory requirements, to bring actions to enforce the new law. Without Department guidance, employers – those that send and those that use temporary workers – are scrambling to identify best practices to comply with the new law that became effective immediately.

WHAT BROUGHT ABOUT THE AMENDMENTS?

Originally passed in 2006, the Act regulates staffing agencies, which are responsible for placing temporary workers or “day and temporary laborers,” to their third-party clients. These most recent amendments are intended to greatly strengthen protections for Illinois’ day and temporary laborers. The rationale behind these changes stems from the significant growth in the number of temporary workers – from approximately 300,000 to more than 650,000. Additionally,  the number of day labor and temporary labor services agencies has risen from approximately 150 agencies with 600 branch offices to over 300 agencies with more than 800 branch offices.

Legislators reported that day and temporary laborers, as a group, are more vulnerable to the abuse of their labor rights, including unpaid wages, failure to pay for all hours worked, minimum wage and overtime violations as well as unlawful deductions from their pay for meals, transportation, equipment and other items. In an earlier version of the bill that became law, Sponsor Edgar Gonzalez, Jr. explained that these workers were more than twice as likely to live in poverty,  dependent on public assistance, part of a two-tier pay structure and suffer occupational injuries at rates 2 to 3 times higher than directly hired employees. Illinois amended the Act to protect these workers by imposing new obligations and increasing civil penalties, creating a level playing field for employers who have complied with the law and protected workers.

WHAT CHANGED FOR STAFFING AGENCIES?

Among the changes for staffing companies:

1. Staffing companies must pay the laborers assigned to a job site for more than 90 days “equal pay for equal work,” including benefits. This is in relation to the lowest-paid direct employee at the client company, holding equivalent seniority and performing the same or substantially similar work that requires comparable skills, effort and responsibility within similar working conditions. If there is no comparable direct employed worker, the staffing company shall pay the laborer no less than the rate of pay and equivalent benefits of the lowest-paid direct hired employee of the company with the closest level of seniority. The staffing company may pay the hourly cash equivalent of the actual costs of benefits in lieu of providing benefits under this section. Plainly, this may have the consequence of moving temporary laborers before they reach the 90-day threshold
2. Staffing companies may still place workers at job sites where there are strikes, lockouts or other labor troubles, but they must provide laborers with written notice of such events in a language they comprehend. Laborers must also be granted the right to refuse the assignment without retribution
3. Staffing companies must provide general awareness and safety training for recognized industry hazards in the preferred language of the laborers at no expense to them. They must provide a general description of the training course, including the topics covered to the client company at the start of the contract with the client company
4. Staffing companies must inquire about safety at the client company’s worksite. To comply, the staffing companies may visit the job site. They are required to advise the client company of any  hazards and urge the client company to correct them or remove their laborers from that site
5. The State increased the registration fees for staffing companies, increasing the cap from $1,000 to $3,000, and for branch fee registrations, from a maximum of $250 to $750
6. Penalties also increased for violations of the Act, ranging from a minimum of $100 to a maximum of $18,000 (which was an increase from the maximum penalty of $6,000).  For repeat or subsequent violations, the penalties increased from a minimum of $2,500 to a maximum of $7,500

WHAT CHANGED FOR CLIENT COMPANIES?

Along with these changes for the staffing companies come changes for the client companies. These include:

1. To ensure staffing companies provide “equal pay for equal work,” client companies must share  information with the staffing company regarding the pay and benefits received by their direct employees
2. Client companies are now required to disclose information to staffing companies about any anticipated job hazards
3. Client companies must review the staffing company’s safety training and provide training tailored to their job site
4. Client companies must permit staffing agencies to visit their site to observe their safety practices
5. If the client company changes the job tasks or work location and new hazards may be encountered, the client company must inform the laborers and the staffing agency of the change and the new job hazards. Laborers and staffing companies are authorized to refuse job tasks until they have been fully trained
6. The Act also increased penalties against client companies for violations, setting the range from a minimum of $100 to a maximum of $1,500

ENHANCED ENFORCEMENT

Besides increasing the penalties for violations, the Act empowers “interested parties” to bring actions and authorizes the Attorney General to suspend or revoke staffing company registrations for public health concerns or violations of the Act.

An “interested party” is likely a labor union or nonprofit worker organization.  The Act defines it as an “organization that monitors or is attentive to compliance with public or worker safety laws, wage and hour requirements or other statutory requirements.”

An interested party may:

1. Submit a complaint to the Department
2. Before a complaint is filed in state court, the Department will give the named party, staffing company or client company, an opportunity to cure the violation
3. The interested party is incentivized to bring the action by a 10% bounty of the penalties assessed against the named party. The remaining 90% will go into the Child Labor and Day and Temporary Labor Services Enforcement Fund
4. There is a three-year statute of limitations for the bringing of an action

Day and temporary labor services already were regulated by the Department. The amendments will increase the obligations of both the staffing companies and client companies to enhance the protection of workers’ safety. If you are a staffing company or use temporary laborers in your business, it is crucial to promptly familiarize yourself with the new obligations. The Department will be creating regulations and guidance to assist you in your compliance.