New Jersey Governor Phil Murphy signed Assembly Bill 1474, otherwise known as the Temporary Workers' Bill of Rights (Act), on February 6, 2023. The bill provides significant protections for certain classifications of New Jersey temporary workers (Workers) and establishes sweeping new requirements for temporary help service firms (Firms) that are located in, operate in, or transact business within New Jersey, and third-party clients (Clients). The Act creates a private right of action against Firms and Clients, including joint and several liability for Firms and Clients for certain violations of the Act.
Below is an outline of responsibilities and pertinent information under the Act, the bulk of which becomes effective on August 5, 2023.
Importantly, two provisions take effect on May 7, 2023:
- Anti-retaliation/discrimination provisions. The Act prohibits any retaliation by Firms or Clients in response to Workers exercising their rights as provided under the Act. Any disciplinary action against a Worker within 90-days of exercising their right raises a rebuttable presumption of retaliation and exposes the Firm and Client to joint and several liability and damages.
- Notices. Firms are required to provide Workers with a detailed written notice either on or before the first day of the assignment. The notice must contain specific information on the Firm, the location of the work, the number of hours worked at each location, the rate of pay, the total pay period earnings, deductions and the reasons for the deductions, and any other information required by the Commissioner of Labor and Workforce Development (Commissioner).
I'm a Temporary Help Service Firm – What Do I Need to Know?
Applicability
There are requirements and information that specifically apply to Firms. The first consideration for Firms is whether the Act applies to them, as the statute specifies that it applies to the following Department of Labor categories:
- Other Protective Service Workers (33-9000)
- Food Preparation and Serving Related Occupations (35-0000)
- Building and Grounds Cleaning and Maintenance Occupations (37-0000)
- Personal Care and Service Occupations (39-0000)
- Construction Laborers (47-2060)
- Helpers, Construction Trades (47-30000)
- Installation, Maintenance, and Repair Occupations (49-0000)
- Production Occupations (51-0000)
- Transportation and Material Moving Occupations (53-0000)
- Or any successor categories as the Bureau of Labor Statistics
may designate.
- Note that this allows the list to be expanded.
After determining that the Act applies to your Firm, keep in mind the following responsibilities.
Certification
Certification is a condition precedent that must be satisfied prior to Firms and Clients entering into contracts. A principal executive officer of the Firm must submit a certificate to the Director of the Division of Consumer Affairs in the Department of Law and Public Safety (Director) under oath providing information on the Firm and its compliance with the Act.
Upon receiving the certification, the Firm must provide proof of the certification to each Client. If the certification is suspended or revoked by the Director, the Firm must notify the client within 24 hours. The Division of Consumer Affairs in the Department of Law and Public Safety will maintain a public list on its website of Firms to provide notice on whether or not the Firms are certified.
Payment of Wages
The Act requires that Workers are paid the same average rate of pay and benefits (or cash equivalent thereof) as permanent employees performing similar or substantially similar work at the time the Worker is assigned. The Firm and Client are subject to joint and several liability for violations of this section.
If a Worker appears for an assignment and is not utilized, the Worker must be paid for four (4) hours; however, if the Worker is transferred to another location and work, the Worker must be paid for two (2) hours. Wage payments must be paid bi-weekly. Firms that make daily payments must provide written notice of the change and can satisfy this requirement by posting a notice in a conspicuous location stating that the Worker has the right to request bi-weekly checks.
Firms cannot charge a Worker for cashing a check, for a credit check, criminal background check, or drug test.
Recordkeeping
Firms are required to maintain records for six years from the date employment ended or six years from the date the contract ended. The Act requires specific records are maintained including, but not limited to information on each Client, information on each Worker sent to the Client location, all contracts, all notices, and wage deductions. If a Worker requests copies of his or her records, the Firm must produce them within five days at no cost to the Worker.
Notices
In addition to the notice provided on the first day of the assignment, Firms must alert Workers if there is a change of the work location and if the location is on a strike (note that when there is a strike, the Worker has the right to refuse the assignment).
The Firm must provide each Worker with an annual earnings summary no later than February 1 of each year (note that the IRS already requires employers to provide an annual W-2 wage statement by January 31, unless it falls on a weekend or legal holiday then the statements are due the next business day). The Firm must give notice of the annual earnings summary at the time of each payment or post a notice in a conspicuous location.
Miscellaneous
Various provisions apply if the Firm is involved with transporting the Worker to and from the work site, which expose the Firm to joint and several liability with the party transporting the Worker.
Finally, a Firm cannot interfere with a Client's offer or a Worker's acceptance of converting to a permanent employee.
I'm a Client of a Temporary Help Services Firm – What Do I Need to Know?
As a Client of a Firm, there are specific things to consider before entering a contract with a Firm, during the contractual relationship, and at the termination of the contract.
Prior to signing a contract with a Firm, Clients must confirm that the Firm is certified. As stated above, the Division of Consumer Affairs will post a list of Firms on its website to confirm whether or not the Firms are certified. In addition to confirming certification prior to entering the contract, the Client must confirm the Firm is certified every March 1 and September 1.
As previously mentioned, the Act requires that Workers are paid the same average rate of pay and benefits (or cash equivalent thereof) as permanent employees performing similar or substantially similar work at the time the Worker is assigned. The Firm and Client are subject to joint and several liability for violations of this section.
If a Worker is contracted for a single day, the Client must provide a work verification form approved by the Commissioner that contains: the date, Worker's name, work location, and hours worked.
What may be the most obvious requirement is the fact that the Firm is not loaning out Workers for free. Accordingly, the Client is required to reimburse the Firm for the payroll wages and taxes paid to the Worker.
Finally, while Firms are required to maintain records for six years, the statute is silent on how long Clients are required to maintain records. Accordingly, we recommend Clients maintain the records related to the Firm and Workers for the duration of the six-year statute of limitations.
Conclusion
In advance of the Act going into effect, Firms and Clients should develop polices and review agreements to ensure compliance with the Act, including, but not limited to, wage and notice requirements and benefit policies. Buchanan's labor and employment attorneys can assist with the necessary preparation for achieving compliance under the Act.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
