New Jersey Enacts First-of-Its-Kind Temporary Workers’ Bill of Rights

New Jersey Governor Phil Murphy recently signed into law the Temporary Workers’ Bill of Rights, which is the first law in the nation to require equal pay for temporary workers. Under the law, employers must pay temporary workers no less than the average rate of pay and cost of benefits provided to company employees in similar positions who perform the same or substantially similar work. It also gives temporary workers rights to certain information on the terms and conditions of their engagement and imposes significant obligations on staffing agencies and their clients.

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

NOTABLE PROVISIONS

The law imposes several new and significant requirements on staffing agencies and their clients. The law applies to “temporary laborers,” defined as workers who contract for employment with a “temporary help service firm” in certain “designated classification placement” categories. Those designated placement categories are numerous and correspond to specific occupational categories designated by the US Department of Labor’s Bureau of Labor Statistics:

• 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
• Any successor categories as the Bureau of Labor Statistics may designate

Governor Murphy has stated that the law “establish[es] necessary guidelines for temporary help service firms and third-party clients to ensure that these workers are afforded basic protections and treated with the dignity they deserve.” [1] However, the law’s requirements—especially those pertaining to compensation equivalency and extensive notification and recordkeeping—could create significant disincentives to use staffing agencies to provide temporary labor in New Jersey.

Some of the more notable provisions of the new law are listed below.

EQUAL PAY REQUIREMENTS

Staffing agencies must pay temporary laborers at least the average rate of pay and provide equivalent benefits (or cash equivalent) of the “employees of the third party client 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 for the third party client at the time the temporary laborer is assigned to work at the third party client.”

The third-party client and the temporary help service firm are jointly and severally liable for violations of this equal pay requirement.

REQUIRED NOTICES TO TEMPORARY LABORERS

Staffing agencies must provide temporary laborers “at the time of dispatch” a statement in English (or their primary language) containing the following:

1. the name of the temporary laborer;
2. the name, address, and telephone number of:
   1. the temporary help service firm, or the contact information of the firm’s agent facilitating the placement;
   2. its workers’ compensation carrier;
   3. the worksite employer or third-party client; and
   4. 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 (the New Jersey Earned Sick Leave Law), and the terms of its use.

Temporary laborers are entitled to 48 hours’ notice “when possible” when there is a change in their schedule, shift, or location for a multi-day assignment.

REQUIRED ITEMIZED WAGE STATEMENTS TO TEMPORARY LABORERS

Temporary laborers are entitled to a “detailed itemized statement” with the following information at the time of wage payments:

1. the name, address, and telephone number of each third-party client at which the worker worked. If this information is provided on the worker’s pay stub, a code for each third-party client may be used so long as the required information for each coded third-party client is made available to the worker;
2. the number of hours worked by the worker at each third-party client each day during the pay period. If the worker is assigned to work at the same work site of the same third-party client for multiple days in the same work week, the temporary help service firm may record a summary of hours worked at that third-party client's worksite so long as the first and last day of that work week are identified as well;
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 worker’s pay made by the temporary help service firm, and the purpose for which each deduction was made, including for the worker’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 that the temporary help service firm may charge to a third-party client to directly hire the worker; and
6. any additional information required by the commissioner.

PROHIBITIONS ON RESTRICTING TEMPORARY LABORER EMPLOYMENT WITH A THIRD-PARTY CLIENT

The law prohibits temporary help service firms from restricting the right of a temporary laborer to work for a third-party client, but the firm may charge a placement fee to the third-party client who hires the worker. The fee, however, is capped at “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 worker has performed work for the temporary help service firm in the preceding 12 months.”

The temporary service firm must disclose to each affected temporary laborer on a 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 worker during each pay period compared to the total compensation cost for the temporary laborer, including costs of any benefits provided.”

RECORDKEEPING REQUIREMENTS FOR TEMPORARY HELP SERVICE FIRMS

Temporary help service firms must keep the following records when it places one or more temporary laborers with a client, for six 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. The third-party client shall be required to remit all information required under this paragraph to the temporary help service firm no later than seven 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 employment notices provided in accordance with the statute;
7. the amounts of any deductions to be made from each worker’s pay by either the third-party client or by the temporary help service firm for the worker’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.

CERTIFICATION REQUIREMENTS FOR TEMPORARY HELP SERVICE FIRMS

Temporary help service firms may not place temporary laborers unless the director of the NJ Division of Consumer Affairs in the Department of Law or Public Safety (or the director’s designee) certifies the firm to do so.

The director must also assess to temporary help service firm’s yearly fees a certification fee of up to $2,000 per year per firm and a fee of $750 per year for each of the firm’s offices or branches where it regularly conducts business.

Temporary help service firms must also obtain a surety bond and file it with the director.

OTHER PROVISIONS

Other provisions in the law include prohibitions on certain wages deductions and prohibitions on assessing fees to transport temporary laborers. In addition, the law provides for civil penalties between $500 and $5,000 per violation and private rights of action for violations of the law, including a private right of action for temporary help service firms against third-party clients, as well as anti-retaliation provisions. Temporary help service firms also are potentially subject to losing their certifications. The law further prohibits temporary help service firms from sending temporary laborers to work locations where any strike, lockout, or other labor dispute exists without first informing the temporary laborers of the labor dispute and their right to refuse the assignment.

RECOMMENDATIONS FOR EMPLOYERS

New Jersey employers should consider taking the following steps:

• For employers engaging temporary staffing firms, consider whether the benefits of engaging workers through such firms in New Jersey outweighs the risk and burdens imposed by the law.
• Coordinate with temporary staffing firms to ensure that the statutory requirements, including the equal pay mandate are being met.
• Conduct a pay equity analysis of temporary workers to ensure compliance with the equal pay requirements.
• Reevaluate vendor contracts with staffing firms to ensure statutory compliance.
• Train appropriate personnel on the law’s mandates.