The New Jersey Department of Labor and Workforce Development recently issued its proposed regulations for New Jersey’s Temporary Workers’ Bill of Rights (TWBR). The proposed regulations provide some clarity on several provisions. However, these proposed regulations leave several areas ambiguous, particularly regarding the calculation of benefits for pay equity, and the scope of the law itself.
In the last few months, the notice and retaliation provisions of the law went into effect, a mandatory notice form was issued, and FAQs were compiled.
Pay Equity and Placement Fees
The cornerstone of the TWBR is the pay equity provision. The law’s demand for equal pay for substantially similar work, however, comes with challenges. The calculation of the average cost of benefits is not clearly defined, making compliance difficult.
For example, the regulations merely state that benefits means “fringe benefits, including but not limited to, health insurance, life insurance, disability insurance, paid time off (including vacation, holidays, personal leave and sick leave in excess of what is required by law), training, and pension.”
The regulations say third-party clients should provide “a listing of the hourly rate of pay and cost per hour of benefits for each employee of the third-party client who the third-party client determines would be a comparator employee.” The proposed regulations do not clarify the precise contours of the benefit calculations, potentially leaving firms open to liability. Further guidance on this issue is desperately needed.
The lack of clarity with respect to benefit calculations also implicates placement fees. Under the TWBR, a temp agency cannot restrict the right of a third-party client to offer employment to a temporary laborer or restrict the right of a temporary laborer to accept a permanent position for any other employment. The temp agency may charge a placement fee, but the TWBR did not provide clear guidance on how a placement fee should be calculated.
The regulations provide step-by-step instructions, but those instructions require temp agencies to calculate the daily cost of benefits provided to the temporary laborer during the assignment with a third-party client. Given the ambiguities with respect to the scope of benefits, calculation of the placement fee is unclear.
The proposed regulations provide clarification to help firms determine whether a temporary laborer and third-party client employee are performing substantially similar work. The regulations make clear that working conditions mean the physical surroundings and hazards, but this does not include job shifts. Additionally, skill is measured by factors such as the experience, ability, education, and training required to perform a job.
Notice Requirements and Anti-Retaliation Measures
The notice and retaliation provisions took effect on May 7. The law and proposed regulations impose strict notice and anti-retaliation requirements on temp agencies. The regulations make plain that all temp agencies must use the state-authorized form.
The proposed regulations indicate that for multi-day assignments, a temp agency is only required to provide the assignment notification statement to the temporary laborer on the first day of the assignment and on any day that any of the terms listed on the assignment notification statement are changed.
The detailed wage notice and the comprehensive prohibition of retaliatory actions significantly strengthen protections for temporary workers. However, the proposed regulations might have further clarified the practical aspects of these requirements, such as detailing methods for recording receipt, like read receipts on emails, and how the presumption of retaliation might be rebutted.
The law requires third-party clients to submit certain information to the temp agency within seven days of the last day of the workweek worked by a temporary laborer. The regulations make clear that a third-party client’s failure to remit the requisite information will not constitute a violation “when the third-party client has been precluded from submitting those time records for reasons beyond its control.” It is unclear from the regulations what kinds of circumstances would be beyond the control of third-party clients. That said, employers need to tread carefully, as each violation could result in penalties of up to $500.
The proposed regulations describe the criteria the state will use to determine administrative penalties. The state will consider the seriousness of the violation, past history of violations, the good faith of the temp agency or third-party client, and the size of the business.
The FAQs provide helpful information every temp agency in New Jersey should know about. For example, temp agencies must comply with all of the requirements of the new law with regard to the temporary laborer who is assigned to work for a third-party client in New York. Additionally, the FAQs indicate firms that do not know the length of an assignment do not need to specify the length of the assignment on the notification form.
The Law is Subject to Ongoing Litigation
A federal court in New Jersey is considering a temporary restraining order to delay implementation of the remaining provisions of the law. The plaintiffs in that case, the New Jersey Staffing Alliance, the New Jersey Business and Industry Association, and the American Staffing Association, challenge the validity of the law and argue the enactment violates the dormant Commerce Clause and the Privileges and Immunities Clause under the United States Constitution, among other things. Temp agencies should keep abreast of developments in this case.
Overall, the TWBR and its proposed regulations offer a remarkable extension of rights and protections to temporary laborers in New Jersey. However, several areas might have benefited from greater clarification in the regulations, such as the scope of the law, calculation of benefits for wage parity, and details of joint liability in private lawsuits.
Seyfarth is a large law firm headquartered in Chicago. © 2023. All rights reserved. Reprinted with permission via Lexology.