Many New Jersey employers, particularly those with fluctuating staffing needs, use temporary workers to supplement their staff. Typically, employers have contracts with staffing agencies who provide workers to meet the Company’s temporary staffing needs.
On February 6, 2023, Governor Murphy signed P.L. 2023 c.10, also known as the “Temporary Workers’ Bill of Rights” which may have a significant impact to these temporary staffing arrangements in business sectors that rely most heavily on them. Specifically, the new law applies to workers in “designated classifications,” as listed by the Bureau of Labor Statistics, including workers in the food preparation, construction, maintenance, repair, production, personal service, and transportation industries, among others.
The Bill’s most controversial provision is one that requires that the temporary employees receive the “average rate of pay and average cost of benefits, or the cash equivalent thereof, of employees of the third-party client performing the same or substantially similar work.” In other words, the temporary employee must make more than the employer/client’s employees because they must receive the cash equivalent of benefits they are not entitled to receive as temporary employees.
With a joint and several liability provision running to the third-party client, this law creates a substantial burden on employers to align the temporary workers’ assignments with their own employee’s roles, compute the average of the amounts earned by their employees (some of which may have significant seniority or other relevant background experience resulting in higher earnings), determine the “average” “cash equivalent” of their employees’ benefits, and then ensure that the temporary employees working in the same roles receive at least this amount.
In addition to the change discussed above, the law also has several additional protections including robust notice requirements, limitations on payroll deductions, and anti-retaliation protections.
The notice and anti-retaliation provisions take effect on May 7, 2023 (90 days from the date the Governor signed the bill into law) and the remaining provisions take effect on August 5, 2023 (180 days after signing).
New Jersey employers who utilize temporary employees to supplement their workforce should consult with experienced labor and employment counsel about these changes. Reed Smith’s Labor & Employment team will continue to monitor these developments and provide updates. Should you have any questions about the requirements under the new law or other issues impacting your work force, Reed Smith’s experienced attorneys are available to assist.