Temporary staffing agencies seek to block new state labor law
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[November 29, 2023]
By PETER HANCOCK
Capitol News Illinois
phancock@capitolnewsillinois.com
SPRINGFIELD – A group of temporary staffing agencies and their trade
associations are asking a federal court to block enforcement of a new
state law that governs how day laborers and temp workers are managed and
paid.
The lawsuit, filed earlier this month in Chicago, challenges several
changes enacted this year to the Illinois Day and Temporary Labor
Services Act, a law originally passed in 2006 to bring those staffing
agencies under state regulation.
That act applies to an estimated 650,000 workers in Illinois who are
employed by companies that provide short-term labor in blue collar
industries such as warehousing, light manufacturing and distribution
facilities. Professional and clerical staffing services are exempt from
the law.
Since its 2006 enactment, the law has required those staffing agencies
to register with the Illinois Department of Labor. It also established
minimum protections for employees of those firms such as a guarantee of
at least four hours of pay whenever they are sent to an assignment.
During this year’s spring legislative session, state lawmakers enacted
sweeping amendments to the law that imposed new mandates on staffing
agencies and extended new protections to short-term workers.
One of the biggest changes is a requirement that after 90 days on an
assignment, a temp worker is entitled to pay and benefits that are “not
less than” those offered to comparable employees who are directly hired
by the client company.
Another change requires staffing agencies to disclose to their workers
the existence of any strikes or other labor disputes at a work site and
gives those workers the right to refuse such an assignment without being
penalized by the staffing agency.
Additionally, the new law empowers any “interested party” – defined as
“an organization that monitors or is attentive to compliance with public
or worker safety laws, wage and hour requirements, or other statutory
requirements” – to sue a staffing agency if it believes the agency is
violating any part of the law.
State Sen. Robert Peters, D-Chicago, who chairs the Senate Labor
Committee and was the legislation’s chief sponsor, said in an interview
Tuesday that there has been an “explosion” in recent years of employers
using temp labor to drive down the cost of wages and benefits for other
workers.
“They have different rights than everybody else,” he said of temp
workers. “And so there's more use of temp workers, but they don't get
equal pay for equal work. They'd be put into these situations called
perma-temping, where they'd be repeatedly left in a temporary position,
even though they were technically working permanently, and never offered
the permanent job.”
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The new provisions took effect immediately after Gov. JB Pritzker signed
the legislation on Aug. 4. However, lawmakers passed a follow-up measure
during the recent fall veto session delaying implementation of the equal
pay provision until April 1, 2024. Pritzker signed that measure Nov. 17.
Meanwhile, the Illinois Department of Labor is already enforcing other
provisions of the new law through the adoption of emergency, temporary
administrative rules and is in the process of taking public comment as
it works toward adopting permanent rules.
Plaintiffs in the lawsuit, however, are asking a federal judge to block
any enforcement of the new law, arguing that the requirements are overly
burdensome, impossible to comply with, and in conflict with
already-existing federal laws.
“Reasonable minds can differ as to the parameters for reasonable
regulations, but no reasonable debate can be had about the crippling
impact of the amendments to the (statute) and related regulations,” the
lawsuit argues. “They impose extraordinary burden, cost, and compliance
risk in violation of federal law. The amendments and related regulations
essentially guarantee non-compliance because compliance is literally
impossible.”
For example, regarding the equal pay provision of the law, the
plaintiffs argue it is impossible to calculate the value of benefits
such as life and health insurance or retirement contributions being
provided to other employees because the value of those benefits can vary
from one employee to the next.
They also argue that any state laws regarding health and retirement
benefits are preempted by federal laws such as the Affordable Care Act
and the Employee Retirement Income Security Act, or ERISA.
The plaintiffs also object to allowing any “interested party” to sue and
recover damages for alleged violations of the law, arguing that such a
provision leaves staffing agencies open to an infinite number of
lawsuits, regardless of whether the entity suing them has suffered any
damages.
“Temporary staffing agencies therefore face loss of licensure,
substantial and potentially catastrophic statutory penalties, and civil
actions by a potentially infinite number of uninjured third parties for
perceived violations of (the law),” the lawsuit claimed.
Capitol News Illinois is
a nonprofit, nonpartisan news service covering state government. It is
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It is funded primarily by the Illinois Press Foundation and the Robert
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