New Jersey Employers Who Use Temporary Staffing Firms Must Change Their Relationship Based On A New Law – Are You Ready?

A challenge for many employers is the realization that you need more employees than you currently have on payroll to operate your business.?What is one option, temporary employees of course.?However, everything about the utilization of some temporary employees is about to change in New Jersey and it will impact employers as well as staffing firms as of May 7, 2023.

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The signing by the Governor into law of the Temporary Workers Bill of Rights will alter the relationship between these entities, but it can also be an amazing opportunity to find synergies and improve operations, depending on how you approach the new law.

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Before we dive in any further, let’s get two things out of the way.?First, the law is not all you need to be concerned about because the Regulations we are waiting for from the respective departments is critically important to fill in the gaps the law does not specifically address and provide some level of clarity to the items we are about to discuss.?

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Secondly, there is a fundamental truth that every organization needs to understand, this new law does not impact every temporary employee.?It specifically covers positions such as light industrial, production occupations, transportation and material moving occupations and food service employees.?However, the law does not impact professional or secretarial temporary employees.?While you may have various titles in your organization, you need to be mindful that all of this according to the law is based on the Federal Bureau of Labor Statistics and their titles, not yours.?It is about job duties, not what “title” you provide to a particular class of employees who work for you.?Oh and that “professional employee” according to the law, wait for it… is based on the definition from the National Labor Relations Act (NLRA).?Yes, this is a State law for New Jersey, but they borrowed from the Federal government to clarify their parameters.

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FUN FACT:

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What does this all mean to you right now??Well, if you have multiple types of temporary employees working for you, it is possible that you could have some temporary employees that are covered under the new law and still others who are not covered under the law.?For example you might have temporary warehouse or janitorial employees who would be covered and also temporary secretarial employees who are not covered.?If you get both types of employees from the same staffing firm you are going to have to figure out how you are collaboratively going to address the distinctions, which means a deeper level of engagement, discussion and relationship between the client employer and the staffing firm.

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What everyone needs to understand now as it relates to this law and the covered temporary employees are six fundamental areas of emphasis and challenge.?Six areas that the pending Regulations may alter, but for now, these are the items that you need to be aware of and prepared for, today.

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FIRST

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The manner in which you compensate temporary employees will change.?In order to address this issue and ensure compensation equity under the law, you need to take a look at the exact position in question and ensure that you are paying your temporary employee in a given title the same average rate as your full time permanent employees doing the same job.?Before you brush this off, there is an area you must also consider, this comparable rate is not just salary alone, but also must include the benefit component of what you pay the permanent employee.?Which may mean that the temporary employee may actually be paid more in take home pay than the permanent employee, depending on the cost of benefits.

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SECOND

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This law is also about a new level of transparency, which in blunt terms means you have to tell temporary employees, arguably in writing, where they are working, what their schedule will be, how long the assignment is scheduled to last and any entitlement to sick time.?This of course must be provided prior to their first day of temporary work.?You may be thinking, eh, no big deal, I got this.?Well, try this wrinkle, if there is a change in the assignment and the temporary assignment is canceled without at least 48 hours notice to the employee, the employee must still receive compensation.?Which means, a late cancellation will still result in some amount of pay due to the individual.

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THIRD

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In the event that you have struck gold and find a temporary employee who is hands down, amazing and you want to hire them full-time and that individual wants to come work for you full-time as well, the staffing firm is now precluded from interfering with your ability as the client employer from hiring that person.?Now, depending on the contract between the client employer and the staffing firm, there can be a fee charged by the staffing firm, but it also must be disclosed, even to the temporary employee.

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FOURTH

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If you provide transportation for temporary employees, you can no longer charge them a fee for transportation to and from the worksite.?However, you may refer them to a transportation service, but again, not for any fee from the employee.?

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Earlier I mentioned how the relationship between client employer and staffing firm is changing, here is another way that is happening, because there is joint and several liability on both entities in this regard, unless a common carrier or mass transit is utilized.

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FIFTH

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To ensure compliance on all sides of this new relationship, staffing firms are mandated to do several things for the State.?Initially, they must complete an annual certification to the New Jersey Department of Labor and Workforce Development affirming that they are complying with all of the requirements under this new law.?If the certification ever lapses or if the staffing firm is found to have violated the certification itself, all of their contracts with client employers will be null and void.?Further, client employers are precluded from working with staffing firms who do not have a valid certification, and yes, there are penalties for that as well.?In addition, the CEO of the staffing firm must annual certify as to their compliance.?Lastly, every staffing firm will now be required to have a minimum surety bond of $200,000.00 to do business in the Garden State.?These of course are all items that a client employer could request to review.

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SIXTH

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In order to further ensure the protection of temporary employees this law includes rather robust fines and more importantly an anti-retaliation provision that is unseen in other employment laws in the State.?Here, if there are any negative consequences that occur against the employee within 90 days after raising issues covered under this law, there is a rebuttable presumption that what they did was protected activity and both the client employer and staffing firm will be held liable.?In other words, this is another place where there is joint liability on both parties.?To be clear, this is a big deal and something that plaintiff’s counsel representing temporary employees will likely focus on once this goes into effect in May.?

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It is also a very strong reason why client employers and staffing firms need to consider what they need to protect themselves and how they are going to do business going forward because the ability to merely shed potential liability by outsourcing certain roles does change substantially with this new law.

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WHAT TO CONSIDER NOW

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If any of what I have shared is a potential issue for you and your organization, then now is the time to sit down and consider what tomorrow will be like for you under this law.?Remember the initial parts of the law go into effect on May 7, 2023, in particular the notice provisions and the anti-retaliation protections.?The rest of the law is scheduled to go into effect on August 5, 2023.?In fact, now is a good time to contact your employment counsel for guidance, before any specific issues come up.?Remember, we are still waiting for the Regulations to come out from the State, which will likely alter some of your plans and the way organizations engage with staffing firms and temporary employees.

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In the meantime, you would be well served to contact your client employer or staffing firm, which ever you engage with and start a candid conversation about how you are going to move forward, what are you going to need to share with one another, who will be conducting the required training and what success with look like in 2023 and beyond for both of you.

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The information in this Newsletter came from a seminar that I conducted about the new law and issues that it creates for both employers and staffing firms.?While this information is not meant as legal advice, it is meant to provide you with issues that you need to ask yourself as you plan your actions going forward.

Lauri Ann Plante, MSOD, SPHR, SHRM-SCP (she/her/hers) Ken Bode Michael Timmes, SPHR, SHRM-SCP, CPC Ronald Scully, PHR - SHRM CP Dan Fiore, PHR, SHRM-CP BJ Anderson, SHRM-SCP #hr #workplace #emplaw #employmentlaw #flsa #employer #leadership #culture