Update applicable to:
Day and temporary labor service agencies and third-party clients that utilize such workers in Illinois
Illinois is poised to enact significant changes to the Day and Temporary Labor Services Act (DTLSA) through the Temp Worker Fairness and Protection Act (TWFPA). The bill, HB 2862, has been sent to Governor J.B. Pritzker for signature and is expected to become law. HB 2862 will take effect on July 1, 2023, or upon Governor Pritzker’s signature, if signed after July 1.
What are the details?
The innovative law is being pushed by the worker centers Chicago Workers’ Collaborative (CWC) and Warehouse Workers for Justice (WWJ), which say it would restore the temp industry to its original purpose of filling short-term, seasonal labor needs and recruiting new employees into direct-hire jobs.
Definitions for Applicability
Day and Temporary Labor Service Agency is defined as an “entity engaged in the business of employing day or temporary laborers to provide services, for a fee, to or for any third-party client pursuant to contract with the [labor agency] and the third-party client”
Third-party client is defined as “any person that contracts with a day and temporary labor service agency for obtaining day or temporary laborers.
Key provisions of the TWFPA include:
- the introduction of an equal pay requirement,
- expanded protections for day and temporary laborers, and
- safety training and notice obligations for staffing agencies and their clients.
Equal Pay for Equal Work
- The TWFPA establishes an “equal pay for equal work” provision, requiring temporary workers assigned to a third-party client for over 90 days to be paid the same rate and receive equivalent benefits as the lowest-paid directly hired employee with similar seniority and performing comparable work.
- If no comparable employee exists, the laborer must be paid the rate and benefits of the lowest-paid employee with the closest level of seniority.
- Staffing agencies can provide the cash equivalent of benefits instead of offering actual benefits, but the calculation method is not specified.
Right to Refuse Assignment Due to Labor Dispute
- Day and temporary laborers gain the right to refuse assignment to a third-party client involved in a labor dispute, such as a strike or lockout.
- Staffing agencies must provide written notice about the dispute and inform the laborer of their right to refuse the assignment without prejudicing future opportunities.
Safety Training and Notice Obligations
- Staffing agencies must inquire about safety and health practices at the worksite and inform the third-party client about identified hazards.
- They must provide general awareness safety training to temporary workers for industry hazards they may encounter.
- Third-party clients must document and inform the staffing agency about anticipated job hazards, review the agency’s training, and provide worksite-specific training.
- Clients must maintain records of worksite-specific training and allow the agency to verify training and observe safety practices.
- Safety training must also be provided when temporary employees switch roles or locations.
Right of Action for Interested Parties
- Interested parties, defined as organizations monitoring compliance with safety and labor laws, gain a private right of action.
- They can initiate a civil action after exhausting remedies with the Illinois Department of Labor, with a claim filing deadline of three years from the alleged violation.
- Prevailing interested parties receive 10% of assessed penalties and attorneys’ fees, with the remaining 90% deposited into the Child Labor and Day and Temporary Labor Services Enforcement Fund.
Increased Penalties and Registration Fees
- The TWFPA raises penalties for DTLSA violations, allowing the attorney general to request the suspension or revocation of a staffing agency’s registration.
- Violators can face penalties ranging from $100 to $18,000 for initial violations and $250 to $7,500 for repeat violations within three years.
- Registration fees for temporary staffing agencies will increase to $3,000 per agency and $750 for each branch office.
For more information, please see the links below:
What do employers need to do?
Employers in Illinois should consult with employment counsel to ensure compliance with the TWFPA’s equal pay requirements, safety training obligations, and other provisions.
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