On August 4, 2023, Illinois Governor JB Pritzker signed HB 2862 into law, significantly amending the Illinois Day and Temporary Labor Services Act (“the Act”). Effective July 1, 2023, these amendments provide day and temporary laborers with strengthened equal pay rights and protection with several new safety and training requirements. However, the Amended Act leaves several unanswered questions.

Equal Pay for Equal Work (Sec. 42)

The Equal Pay for Equal Work provisions of the Amended Act continue Illinois’ commitment to maintaining wage transparency and classifying workers as employees rather than contractors. The amendments place obligations on day and temporary labor service agencies as well as third-party clients that utilize day and temporary laborers. These include: 

• A temporary laborer who is assigned to work at a third-party client for more than 90 calendar days shall be paid NOT less than the rate of pay and equivalent of benefits as the lowest paid directly hired comparator employee of the third-party client.

• If there is not a directly hired comparator employee, the temporary laborer shall be paid NOT less than the rate of pay and equivalent benefits of the lowest paid directly hired employee of the third-party client.

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

• Upon request, the third-party client to which a temporary laborer has been assigned for more than 90 calendar days shall be obligated to timely provide the temporary service agency with necessary information related to job duties, pay and the benefits of directly hired employees.

• The third-party client’s failure to provide the necessary information shall constitute a notice violation, with the temporary labor service agency as the aggrieved party. The aggrieved party may recover compensatory damages in an amount up to $500.00 for each violation, as well as attorneys’ fees and costs.  

It remains the temporary labor service agency’s obligation to pay the temporary laborers, notwithstanding the obligation of the third-party client to provide the designated information to the temporary labor service agency. Third-party clients that utilize temporary laborers should anticipate requests from temporary service agencies for this information and develop a plan for gathering and providing it to their temporary labor service agencies.

Third-party clients that utilize temporary laborers should also expect temporary service agencies to seek to re-negotiate the pay structure of temporary laborer contracts in order to facilitate compliance with the Equal Pay for Equal Work provision of the Act. This may increase labor costs payable to/through the agency.

Questions left unanswered by the amendments include:

• From what start day must the 90-day period be measured? Does the clock start on August 4, 2023, when the act was signed? On the statute’s retroactive July 1, 2023, effective date? Or must the calculation include time worked prior to these dates? Without clear guidance from the Illinois Department of Labor (IDOL), the most conservative approach would be to assume the DOL will interpret the Equal Pay and Equal Work provision of the Act as requiring the 90-day calculation to begin on the day or temporary laborer’s actual start date at the third-party client, even where it was prior to July 1, 2023. This could result, however, in triggering immediate violations, retroactive to July 1, 2023, if applied to existing long-term workers.

• Does “more than 90 calendar days” include non-working days in the calculation? Based on the ordinary meaning of “calendar” and in the absence of different guidance from the IDOL, we expect the agency to interpret “more than 90 calendar days” as including non-working as well as working days in the calculation. This would be consistent with the interpretation of other employment-related statutes. Thus, if a day or temporary laborer is assigned to a third-party client and works five days a week for a period of over three months, the day and temporary laborer would meet the “more than 90 calendar days” requirement.

• To constitute “more than 90 calendar days” must the days of work be consecutive? In the absence of contrary guidance from the state DOL, we anticipate that “more than 90 calendar days” can include both consecutive and non-consecutive days. Thus, if a day or temporary laborer is assigned to a third-party client for one month, ceases that assignment and later is assigned to the same client for a further period, all time assigned at the third-party client would have to be counted toward the “more than 90 calendar days” trigger.

Regardless of how these calculation questions are eventually resolved, it appears likely that the “more than 90 calendar days” requirement will discourage third-party clients from working with particular temporary laborers on a long-term basis.

Workplace Safety and Training Requirements (Sec. 85)

In addition to safety standards under OSHA, day and temporary labor service and client companies in Illinois will need to comply with new safety and training requirements under the Act. 

At the start of a new contractual relationship, a day and temporary labor service agency must inquire about the client company’s safety and health practices and hazards at the worksite and transmit a general description of the training program it will provide assigned workers, including topics covered, to the client company.

Before assigning an employee to work, a day and temporary labor service agency must provide the temporary laborer with the following:

1. General awareness safety training for recognized industry hazards the laborer may encounter at the worksite, along with providing the training on safety topics previously communicated to the client;
2. The Illinois Department of Labor’s hotline number for reporting safety hazards;
3. Information regarding how the laborer should report safety concerns at the workplace.

Client companies must take these actions before a temporary laborer may begin work:

1. Document and inform the day and temporary labor service agency about anticipated job hazards likely encountered by the day or temporary laborer; 
2. Review the safety and health awareness training provided by the day and temporary labor service agency to determine if it addresses recognized hazards for the client company's industry; 
3. Provide specific training tailored to the particular hazards at the client company's worksite; and
4. Document and maintain records of site-specific training and “provide confirmation that the training occurred to the day and temporary labor service agency within three business days of providing the training” to the temporary worker.

Ultimately, both the day and temporary labor service and client companies are required to provide training specific to the job site. Should the client company implement new job tasks or utilize a work location where new hazards may be encountered, the client company must inform the day and temporary labor service agency and temporary laborer and update both personal protective equipment and training where necessary.

Right to Refuse Assignment to a Labor Dispute (Sec. 11)

Provisions of the Amended Act intended to strengthen the hand of labor unions in strikes and other labor disputes could have serious ramifications for employers. Before a temporary laborer can be sent to a worksite where a strike, lockout or other “labor trouble” exists, the day and temporary labor service agency must provide the temporary laborer with a statement, written in a language the temporary laborer understands, informing them of (1) the dispute and (2) the right to refuse the assignment without prejudice to receiving another assignment. Failure to provide such information shall constitute a notice violation under the Act.

The Act does not expressly define “labor trouble,” leaving the day and temporary labor service and client companies at risk if state authorities decide they interpreted the term too narrowly. Further complicating the issue is that the day and temporary labor service may not know about the alleged labor trouble unless the client company tells them. Yet the Act appears to hold only the day and temporary labor service agency responsible for this type of violation.

The amendment may increase the burdens of employers involved in a strike or lockout that want to use temporary workers to continue business operations. In Illinois, employers may not use “professional strikebreakers,” but employers are allowed to continue the employment of a day or temporary laborer throughout a strike.  By restricting that right the new amendment could weaken the ability of companies to defend themselves during union organizing campaigns or to resist pressure during collective bargaining.

Registration Revocation or Suspension (Sec. 50)

The Illinois attorney general may request that a circuit court suspend or revoke the registration of a day and temporary labor service agency when warranted by violations of this Act. The attorney general must provide notice of such revocation to the director of labor prior to requesting such a suspension or revocation of the registration of a day and temporary labor service agency.  

Expanded Action for Civil Penalties (Sec. 67)

The amendments expand the private right of action under Section 95 of the Act by granting interested parties the right to initiate a civil action against a day or temporary labor service agency or third-party client.  “Interested party” means “an organization that monitors or is attentive to compliance with public or worker safety laws, wage and hour requirements, or other statutory requirements.” This opens the door to involvement by governmental entities like the Illinois Department of Labor or Occupational Safety and Health Administration. Arguably, this could even include labor unions or independent compliance monitors.  Procedurally, the interested party must file a complaint with the Illinois Department of Labor and go through the administrative process before filing a complaint in the county where the alleged violation occurred or where any party resides.  Although the responding party is granted an opportunity to cure, this does not prevent a notice of right to sue from being issued.  Any claim or action filed under this Section must be made within three years of the alleged conduct resulting in the complaint, plus any period for which the limitations period has been tolled during the administrative process.  This addition will likely result in more litigation of claims involving temporary workers. In turn this could become a hot topic for future legislation in Illinois.

Conclusion

By blurring the line between day and temporary labor service and client companies, the amendments could make joint-employer findings more likely under Illinois law and increase potential liability of companies previously regarded as separate entities.  With several important questions left unanswered, the amendments force day and temporary labor service and client companies to wait for guidance from the Illinois Department of Labor. In the meantime, employers with employees in Illinois would be well advised to consult with legal counsel regarding compliance with Act.