New Amendments to Illinois Day and Temporary Labor Services Act: Implications for Staffing Agencies Employing Day or Temporary Workers and Their Clients

Implications of the Latest Changes to the Illinois Day and Temporary Labor Services Act for Staffing Agencies and Clients Hiring Non-Professional or Non-Clerical Contingent Workers.

Illinois HB2862, passed by both Houses of the General Assembly on May 19, 2023, introduces significant amendments to the Day and Temporary Labor Services Act.

The bill was sent to the Governor on June 16, 2023, and is expected to take effect on the date of the Governor’s signature. Absent the Governor’s signature, the law will take affect no later than August 15, 2023, provided it is not vetoed by the Governor. .

These amendments bring significant changes to the Act, impacting both staffing agencies employing day or temporary workers and their clients. The key points of the amendment include:

1. Equal Pay for Workers

   Workers assigned to a client for more than 90 calendar days must receive "equal pay for equal work," including benefits comparable to direct employees of the client. Clients must share benefit type and cost information with staffing agencies to ensure compliance with this requirement. Equivalent benefits may be provided by paying the worker the cash equivalent of the comparable benefits.
   
   

2. Notice of Labor Troubles

   Workers must receive notice when assigned to job sites experiencing strikes, lockouts, or other labor troubles.
   
   

3. Safety Responsibilities

   Staffing agencies must inquire about safety conditions at client worksites, notify clients of existing job hazards, provide training to laborers, and inform clients about the training. Clients must disclose anticipated hazards, review any provided staffing agency training, provide site-specific training, and allow agency visits to observe safety practices.
   
   

4. Increased Fees and Penalties

   Fees charged to staffing agencies to register with the Illinois Department of Labor have increased. Penalties for both the agency, and their clients may now reach up to $18,000 for violations found in a first audit or determined by a court. . Additionally, a distinct violation may be found for each day a violation occurs, for each worker, and for each day a violation continues.
   
   

5. Third-Party Enforcement

   Third-party organizations have the authority to file civil actions to ensure compliance with the Act.
   
   

The Act covers day and temporary labor that does not involve professional or clerical work, exempting staffing agencies and clients engaged exclusively in those fields from these requirements.

Staffing agencies must still register with the Illinois Department of Labor, paying the increased registration fee. The Attorney General has the power to suspend or revoke registrations for public health concerns or violations, and penalties for violations discovered during audits have tripled. Staffing agency clients are now also responsible for ensuring the agencies are registered or will face their own penalties for using unregistered agencies.

Even single day assignments were impacted, as now a staffing agency client must provide Work Verification Form. Failure to do so will result in penalties owed by the client.

Review Your Policies

Staffing agencies and their clients should review their policies and practices to ensure they align with the amended Act. This includes revisiting their compensation structures to ensure equal pay for laborers who have been on assignment for more than 90 days. Determining "equal work" and evaluating the benefits provided by clients can be a complex task, but it is essential to comply with the law.

It is worth noting that similar requirements enacted by other jurisdictions are working their way through the federal court systems. It remains to be seen how the courts will interpret this legislation and how it will impact the Illinois law.

How to Fully Protect Yourself

As a full legal employer of record, TCWGlobal will ensure that day-to-day employer work is conducted in accordance with local and state, and employment laws and regulations. 

The new Illinois amendment serves as a reminder that it's crucial for companies to keep up to date on all legal employment requirements and worker protection laws, especially as more companies utilize contingent workers.

By partnering with an EOR like TCWGlobal, companies can ensure that they remain compliant with local laws and regulations, avoiding costly penalties and legal consequences.