At a Glance
On Aug. 4, 2023, Illinois Governor Jay Pritzker signed into law House Bill 2862, approving sweeping amendments to the Day and Temporary Labor Services Act (“DTLSA” or the “Act”). Since then, the Illinois Department of Labor (IDOL) has issued administrative regulations and proposed rules that are currently working their way through the notice-and-comment process. The amendments, which take immediate effect, together with the accompanying rules and regulations, expand protections for day and temporary laborers by (1) implementing several new requirements for staffing agencies and the companies that contract with them, and (2) increasing penalties for violations.
What This Means for Staffing Agencies and Their Client Companies
The following is a short summary of the main changes to the DTLSA:
- Equal Pay for Equal Work. Day and temporary laborers who are assigned to work at a client company for more than 90 days in any 12-month period must now be paid at least the same rate of pay and receive equivalent benefits as the lowest paid directly hired employee who has the same level of seniority and performs similar work on similar jobs. If no comparative employee exists, then the laborer must be paid not less than the rate of pay and equivalent benefits of the lowest paid directly hired employee with the closest level of seniority at the client company. Upon request, client companies must provide the staffing agency with all information related to job duties, pay, and benefits of directly hired employees so that the agency can comply with this provision. Critically, staffing agencies and client companies share legal responsibility and liability for the payment of wages under the Act.
- Safety Hazard Awareness and Trainings. Agencies and client companies must work together to implement safety awareness and hazard trainings on or before a laborer’s first day at a worksite each year. Agencies bear the responsibility of inquiring from a client company about safety practices and hazards at the worksite, as well as providing training to laborers on general safety awareness and industry hazards likely to be encountered at the worksite. Client companies, in turn, must inform agencies of the company’s safety practices, anticipated industry hazards likely to be encountered at the worksite, and all actions taken by the company to eliminate, mitigate, or protect workers from hazards. These disclosures must provide the steps workers should take to avoid or control the hazards, including emergency evacuation and shelter-in-place procedures. Client companies must also review the agency’s proposed general training and provide any additional training tailored to the particular hazards of the worksite. Trainings must be provided at no cost to the laborer and in a language the laborer understands.
- Labor Disputes. Day and temporary laborers have a right under the amendments to refuse an assignment to a workplace where a strike, lockout, or other labor dispute exists. Accordingly, at or before the time of dispatch, agencies must notify laborers in writing of any existing disputes at the intended worksite, and of the laborer’s right to refuse the assignment without prejudice to receiving another. Client companies must inform staffing agencies if a strike, lockout, or other labor dispute exists at the location so that the agency can comply with this section.
- Work Verification Form. For each laborer contracted to work a single day, the client company is required to provide a work verification form, which includes the date, laborer’s name, work location, and hours worked. The company may comply by using the IDOL’s approved verification form or by implementing a timekeeping system that allows the laborer to print a daily record of time worked.
- Registration. Annual registration fees have increased to $3,000 per agency (from $1,000) and $750 per additional branch (from $250). The amendments further require agencies to register with the IDOL and to provide proof of valid registration to client companies. Client companies, in turn, must verify the agency’s registration with the IDOL both before entering into a contract and semi-annually (on March 1 and Sept. 1).
- Increased Penalties. Violations of the Act may result in civil penalties between $100 and $18,000 for first time violations. Subsequent violations within three years may incur increased civil penalties of not less than $250 and not more than $7,500 per violation, per laborer, per day. The amendments make clear that staffing agencies and client companies share liability under the Act for violations of Illinois wage law.
Next Steps for Employers
The amendments to the DTLSA, along with the accompanying rules and regulations, are broad and go beyond those highlighted here. They also contain ambiguities and fall short of providing clear guidance, especially around the “Equal Pay for Equal Work” provision. As such, staffing agencies and companies that contract with them should work with counsel to review and update their policies, practices, and contracts related to day and temporary laborers to ensure they comply with the updated law.
For more information, please contact a member of Taft’s Employment and Labor Relations practice group.