Illinois Day and Temporary Labor Services Act Changes

By Kevin J. Lorenz - McMahon Berger P.C.

November 7, 2023

Wage and labor changes for temporary workers in Illinois have made waves for employers since the enaction of amendments to the Day and Temporary Labor Services Act.  These revisions immediately became effective upon being signed into law by Illinois Governor J. B. Pritzker on August 4, 2023. Because the amendments were both significant and effective immediately the Illinois Department of Labor was forced to issue Emergency Rules and Proposed Permanent Rules. These changes are meant to provide day and temporary laborers with expanded rights for equal pay as well as options against their employers when disputes arise.

The major changes to the Day and Temporary Labor Services Act are as follows:
 
Equal Pay for Equal Work

One of the most significant changes to the Day and Temporary Labor Services Act (the “Act”) relates to Illinois’s continued goal of classifying workers as employees rather than independent contractors.  As a result, employers and temporary labor service agencies who utilize and employ day and temporary laborers will be subject to stricter obligations to maintain wage transparency, including:

•    Temporary laborers assigned to work at employers for more than 90 days are not to be paid less than the rate of pay and equivalent benefits of the lowest paid directly hired comparable employee of that employer. If there is not a comparable directly hired employee, the temporary laborer shall not be paid less than the rate of pay and equivalent benefits of the lowest paid hired employee of that particular employer.

•    The temporary labor service agency may pay the hourly cash equivalent of the actual cost of the benefits as opposed to providing benefits to temporary workers.

•    Employers may be required to provide a temporary service agency with necessary information related to job duties, pay, and benefits of directly hired employees upon request. Should the employer fail to provide any of the requested necessary information, the aggrieved temporary service agency may recover compensatory damages in an amount up to $500.00 for each violation, as well as attorneys’ fees and costs.
 
Employers should expect more requests for information from temporary labor service agencies as well as attempts to re-negotiate pay structures of temporary laborer contracts which would increase labor costs payable to the agency.

Notably missing from the amendments is a definition of “benefits.”  The emergency rules have provided some clarification that “benefits” include  health care, vision, dental, life insurance, retirement, leave (paid and unpaid), other similar employee benefits, and other employee benefits as required by State or federal law. In addition, there is no guidance provided by the Department of Labor as to when the 90-day period begins.  It also does not detail whether “more than 90 days” includes non-working days, or whether work must be consecutive for that 90-day period.
 
Workplace and Safety Requirements

In addition to federal OSHA safety standards that employers are required to comply with, employers will need to comply with new safety and training requirements under the Act.  Both the temporary labor service agency as well as the client company are required to provide safety training specific to the job site for all day and temporary laborers (in addition to full-time employees).  In the event that the client company implement new duties or a work location where new hazards may be encountered, it must inform both the temporary laborer(s) and the temporary labor service agency of all new hazards and provide appropriate training when necessary.
 
Right to Refuse Assignment to a Labor Dispute

A portion of the amendments to the Act strengthens the position of labor unions during strikes and other long-term labor disputes.  If a temporary laborer is assigned to a worksite that is involved in a labor dispute, the temporary labor service agency must provide the laborer with a written statement informing them of the dispute and the right to refuse the assignment without prejudice to receiving another assignment.  Failure to provide the laborer with such information constitutes a notice violation under the Act.

Labor disputes are not defined under the new amendments. Thus, there is a risk that if the Illinois Department of Labor interprets the term too broadly to include any and all disputes between employers and labor unions.  An employer’s position in the labor dispute could be weakened significantly during collective bargaining by making it difficult to find temporary employees to replace workers on strike.
 
Registration Revocation or Suspension

The Illinois Attorney General may request the courts suspend or revoke registration of a day and temporary labor service agency for violations under the Act.  The Attorney General must first provide notice of such revocation to the director of the Illinois Department of Labor prior to requesting suspension or revocation from the courts.
 
Expanded Action for Civil Penalties

Temporary laborers can initiate a private right of action via a civil suit against both the temporary labor agency and the client employer for violating the Act.  The aggrieved temporary laborer must first file a complaint with the Illinois Department of Labor and go through the administrative process.   The laborer may then file a judicial complaint in the county where the alleged violation occurred or where any party (the employer, the temporary labor agency or the temporary laborer) resides.

This private right of action mirrors the same kind of enforcement that is permitted under the Wage Payment and Collection Act (the “WPCA”) which provides for substantial penalties for violations as well as attorneys’ fees.  Like the WPCA, the Act  also imposes significant penalties for violations and attorneys’ fees.

These changes to the Day and Temporary Labor Services Act provide a significant challenge to employers who use temporary laborers.  While the Proposed Rules have yet to be enacted, there are still many questions as to how the Act will be implemented and interpreted.  Employers should review existing policies and practices concerning their obligations under the Day and Temporary Labor Services Act to avoid any violations. McMahon Berger, P.C. will continue to monitor developments concerning the Act and will provide updates as they occur.

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