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Earlier this year, New Jersey passed a groundbreaking law regulating temporary help service firms. The new law justifies the regulations because “full-time temporary help service firm workers earn 41 percent less than workers in traditional work arrangements, and these workers are far less likely than other workers to receive employer-sponsored retirement and health benefits.” N.J. Stat. § 34:8D-1. Most of the law’s provisions will take effect on August 5, 2023, however, the new hire notice requirement and non-retaliation provision went into effect on May 5, 2023.

The new law creates many regulations for temporary help service firms and their “third party clients” (the companies that use this temporary labor). The regulations cover a range of topics—from the creation of a new registration system for the workers, to prohibiting non-poaching agreements. This law applies only to workers who are placed in a temporary assignment by a temporary help service firm to perform work in certain occupational categories, including: food preparation and serving; production such as laundry and dry cleaning, food processing, and textile work; personal care and service such as amusement, entertainment, and dressing room attendants; construction; transportation and moving such as drivers, parking attendants, and material moving; building and grounds cleaning and maintenance such as janitors, cleaners and landscaping workers; protective service such as security guards and crossing guards; and installation, maintenance and repair.

Here we are covering major new regulations. However, please note this is not an exhaustive list of employer obligations under this law.

 

Equal Pay and Benefits

The new law requires temporary help service firms to provide temporary laborers with equal pay and benefits as comparable full-time employees who perform “the same or substantially similar work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions” at the time the temporary laborer is assigned to work for the employer Both temporary help service firms and third-party clients are liable for any violations.

 

Prohibition of Non-Poaching Agreement

Under the law, “[n]o temporary help service firm shall restrict the right of a temporary laborer in a designated classification placement to accept a permanent position with a third party client to whom the temporary laborer has been referred for work, 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.” N.J. Stat. § 34:8D-7

Effectively, this language prohibits non-poaching agreements—agreements frequently used by companies to protect their employees from being poached by the placement companies and from the client poaching the placement company’s employees.

Now, companies will have to be creative when protecting their interest in employees. Notably, the law explicitly permits placement fees. Companies should ensure they take advantage of this provision and bake universal placement fees into their agreements.

 

Itemized Statement Requirements

Firms will be required to provide each temporary laborer with a “detailed itemized statement” either on the laborer’s “paycheck stub or on a form approved by the [Commissioner of Labor and Workforce Development] …. The statement must  include: “(1) the name, address, and telephone number of each third party client at which the temporary laborer worked; (2) the number of hours worked by the temporary laborer at each third party client each day during the pay period; (3) the rate of payment for each hour worked, including any premium rate or bonus; (4) the total pay period earnings; (5) the amount of each deduction made from the temporary laborer’s compensation made by the temporary help service firm, and the purpose for which each deduction was made; and (6) any additional information required by the commissioner.”

 

Certification Requirements

Temporary help service firms must be certified by the State of New Jersey. The certification is handled through the Department of Consumer Affairs. Third party clients must verify the temporary help service firm they work with has a certification.

 

Employee Notice of Assignments

On the first day of every new assignment, workers are entitled to receive notice. The notice must include:

(1) the name of the temporary laborer;

(2) the name, address, and telephone number of:

(a) the temporary help service firm, or the contact information of the firm’s agent facilitating the placement;

(b) its workers’ compensation carrier;

(c) the worksite employer or third-party client; and

(d) the Department of Labor and Workforce Development;

(3) the name and nature of the work to be performed;

(4) the wages offered;

(5) the name and address of the assigned worksite of each temporary laborer;

(6) the terms of transportation offered to the temporary laborer, if applicable;

(7) a description of the position and whether it shall require any special clothing, protective equipment, and training, and what training and clothing will be provided by the temporary help service firm or the third-party client; and any licenses and any costs charged to the employee for supplies or training;

(8) whether a meal or equipment, or both, are provided, either by the temporary help service firm or the third-party client, and the cost of the meal and equipment, if any;

(9) for multi-day assignments, the schedule;

(10) the length of the assignment, if known; and

(11) the amount of sick leave to which temporary workers are entitled under P.L.2018, c.10 (C.34:11D-1 et seq.), and the terms of its use.

N.J. Stat. § 34:8D-3

 

Record Keeping Requirements

Temporary help service firms must keep the following records for six (6) years: “(1) the name, address, and telephone number of the third party client, including each worksite, to which temporary laborers were sent by the temporary help service firm and the date of the transaction; (2) for each temporary laborer: the name and address, the specific location sent to work, the type of work performed, the number of hours worked, the hourly rate of pay, and the date sent; (3) the name and title of the individual or individuals at each third party client’s place of business responsible for the transaction; (4) any specific qualifications or attributes of a temporary laborer, requested by each third party client; (5) copies of all contracts, if any, with the third party client and copies of all invoices for the third party client; (6) copies of all employment notices provided to temporary laborers; (7) the amounts of any deductions to be made from each temporary laborer’s compensation by either the third party client or by the temporary help service firm for the temporary laborer’s food, equipment, withheld income tax, withheld contributions to the state unemployment compensation trust fund and the state disability benefits trust fund  withheld Social Security deductions, and every other deduction; (8) verification of the actual cost of any equipment or meal charged to a temporary laborer; and (9) any additional information required by the commissioner.”

 

Anti-Retaliation Provisions

As of May 7, 2023, it will be unlawful for a temporary help service firm or a third-party client to retaliate against a worker for exercising their rights under this law. Retaliation comes with hefty penalties–the worker will be entitled to: (1) select “the greater of all legal or equitable relief as may be appropriate or liquidated damages equal to $20,000 per incident of retaliation,” (2) reinstatement (if applicable), and (3) attorney’s fees and costs.

 

Penalties

Many of the new regulations come with penalties ranging from $50 to $5000 per violation. These violations could quickly add up.

 

Conclusion

New Jersey’s new law is creating many new regulations for temporary help agencies and their clients. It is important for any employer with this business model or any user of these services to consult with legal counsel before the rest of the law’s provisions go into effect.

Brody and Associates regularly advises management on complying with the latest state and federal employment laws. The subject matter of this post can be very technical. It is also an evolving area of law and very fact specific. Our goal here is to simply alert you of the new laws that may impact your business.  It is not intended to serve as legal advice. We encourage you to seek competent legal counsel before implementing any of the new policies discussed above.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560.