On February 6, 2023, New Jersey Governor Phil Murphy signed a controversial bill known as the “Temporary Workers Bill of Rights” that seeks to equalize the compensation of temporary workers with that of regular employees, increase transparency requirements, and restrict placement fees paid to staffing agencies or firms.

The new law, A1474/S511, will impact the more than 127,000 temporary workers in the Garden State and specifically applies to temporary workers placed with third-party employers through staffing agencies or temporary work firms in security, restaurant, personal care, cleaning and maintenance, construction, repair, transportation, production, and material moving occupations.

In a statement, Governor Murphy noted that “temporary workers, regardless of their race or status, are key contributors to the workforce in our state,” and that signing the law “establishes 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.”

The law, however, may place additional burdens on temporary staffing or service firms and employers that rely on the availability and flexibility of temporary workers. The new law is set to take effect on August 5, 2023, though certain provisions go into effect ninety days from enactment, or May 7, 2023. Below is a summary of some of the key provisions of the law relevant to New Jersey employers.

Wages

Key to the law, covered temporary workers are to be paid no less than the average rate of pay and cost of benefits provided to regular employees of the employers in similar positions with similar skill requirements, responsibilities, and working conditions. This could theoretically allow temporary works to receive greater take-home wages than regular employees.

The law will allow temporary service firms to charge a placement fee to employers with which it places temporary workers. However, temporary service firms will be required to disclose the amount of the fees on temporary workers’ wage payment stubs and notice forms, in addition to, “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.” The law will make employers that contract with temporary staffing firms jointly and severally liable for any violations of both the wages and placement fee notice provisions.

The law will require temporary service firms to provide temporary workers an itemized statement when wages are paid that includes the number of hours worked each day, the rate of pay for each hour, the total earnings for the pay period, and an itemized list of any deductions from compensation. The law also requires covered firms to give temporary workers an annual earnings summary by February 1 of each year.

Placement and Certification

The law will prohibit temporary service firms from restricting the right of temporary workers to accept permanent employment at an employer with which they are staffed, or any other employer, or restrict employers from offering such employment. Temporary service firms may charge placement fees for temporary workers hired permanently, but the law will restrict the amount.

The law will also require temporary service firms to be certified by the director of the New Jersey Division of Consumer Affairs to conduct business in New Jersey. The law will further prohibit employers from doing business with temporary service firms that are not certified.

Disclosures

Under the new law, a temporary service firm will be required to provide a statement to temporary workers at the time of their placement with an employer that includes significant detail about their assignment, including the contact information for the service firm, the third-party employer, the worksite, and the New Jersey Department of Labor and Workforce Development (NJ DOL). In addition, the statement must disclose the terms and conditions of the temporary placement and the duration of the assignment.

Temporary service firms will be required to keep these disclosures updated. Firms will be further required to give temporary workers at least forty-eight hours’ notice if there is a change in the worker’s schedule, shift or location of assignment for a multi-day assignment. This section of the bill goes into effect ninety days after enactment.

Additionally, the law places new record-keeping requirements on temporary service firms, requiring them to retain certain records for six years and to provide copies of those records to any temporary worker or their representative, at no cost, within five days of a written request.

Penalties

Under the new law, temporary service firms may be assessed administrative penalties between $500 and $5,000 per violation for certain violations and could be subject to having their certification denied or revoked. Temporary workers will also have a private right of action to bring claims in New Jersey superior court within six years of employment with the service firm or the termination of a contract between a service firm and a third-party employer.

Moreover, the law contains strong anti-retaliation provisions. There will be a rebuttable presumption that any adverse action taken against a temporary worker within ninety days of a complaint is retaliatory. Temporary workers will be permitted to seek equitable relief as may be appropriate or liquated damages equal to $20,000 per incident of retaliation, reinstatement (if appropriate), and attorneys’ fees and costs.

Key Takeaways

The law will impose additional pay, transparency, and recordkeeping protections for temporary workers and additional obligations for temporary staffing firms and employers in New Jersey. Employers that utilize temporary workers and/or temporary staffing firms may want to review their contracts and agreements with those workers and staffing firms in light of the new law’s requirements.