News

Jul 17, 2023

Temporary Rules for Temporary Workers? New Jersey Department of Labor Issues Guidance on Temporary Workers’ Bill of Rights

Earlier this year New Jersey Governor Phil Murphy signed into law the Temporary Workers’ Bill of Rights (the “Bill of Rights”), which established numerous labor and employment protections for large

Earlier this year New Jersey Governor Phil Murphy signed into law the Temporary Workers’ Bill of Rights (the “Bill of Rights”), which established numerous labor and employment protections for large portions of New Jersey’s more than 125,000 temporary workers. The Bill of Rights’ practical implications are far-reaching, imposing new rules related to pay and benefit equity, and recordkeeping and notice requirements for covered “temporary help service firms” that employ, directly or indirectly, “temporary laborers” in certain “designated classification placements.”

On July 21, 2023 (months after certain provisions of the Bill of Rights already went into effect) the New Jersey Department of Labor and Workforce Development (“NJDOL”) posted on its website a Notice of Proposal containing proposed rules to implement Sections 1 through 7, and Section 10, of the Bill of Rights.

These proposed rules provide highly anticipated clarification on at least some of the provisions of the Bill of Rights and were contemporaneously submitted by the NJDOL for publication in the New Jersey Register on August 21, 2023. The public comment period will end on October 20, 2023.

The proposed rules provide detail on the following topics:

When the Law Applies

The proposed rules state that the Bill of Rights applies if a temporary laborer in a designated classification placement is assigned to work within the state of New Jersey, or if the assignment is outside of New Jersey, if the temporary worker’s primary residence is in New Jersey.

Determining Comparators

The Bill of Rights requires that any temporary laborer covered under the law must be paid an hourly wage rate equal to what is provided to the third-party client’s employees (including an hourly cost of benefits in this calculation) performing substantially similar work on jobs that require similar effort, skill and responsibility.

The proposed rules place the burden on the third-party client to provide relevant information to determine proper hourly pay, benefits, and whether positions are substantially similar. The Bill of Rights contains a joint and several liability provision to ensure that third-party clients and temporary help service firms work together towards compliance.

Hourly Rate Calculations

The proposed rules state:

At the time that the temporary help service firm contracts with the third-party client for the services of the temporary laborer, the third-party client shall provide to the temporary help service firm a listing of the hourly rate of pay and cost per hour of benefits for each employee of the third-party client who the third-party client determines would be a comparator employee. (emphasis added).

The temporary help service firm must then base its calculation of the average rate of pay and average cost of benefits on the information provided by the third-party client. The proposed rules state that calculations must be performed differently depending on whether the comparators are paid on a salary or hourly basis.

Substantially Similar Work

As indicated above, the law requires pay equity for substantially similar work. Prior to the proposed rules, limited guidance was available to help temporary help service firms or their third-party clients determine what constitutes substantially similar work.

The proposed rules aim to resolve discrepancies by delineating that substantially similar work should be viewed as a combination of effort and responsibility of work performed under similar working conditions. They further make clear that job titles and descriptions are not dispositive. Rather, the determination should focus on an analysis of actual duties, and while functions and duties between the temporary laborer and comparator need not be identical, they should be substantially similar.

While experience, ability, education and training required are factors in this analysis, the number of years of service (i.e., seniority) of a particular employee is not relevant to the determination of whether two jobs are substantially similar, even if the third-party client’s employee compensation system is seniority-based. Rather, what is relevant is the number of years of experience that are required to perform a job. Additionally, the use of a merit system for compensation is not relevant to the determination of whether two jobs are substantially similar.

What Must Be Included in Wage Statements

At the time the temporary help service firm pays the temporary laborer their wages, the temporary help service firm must provide to the temporary laborer a detailed itemized statement, either on the temporary laborer’s paycheck stub or on a form that will be available from the NJDOL.

The wage statement must include:

How to Calculate the “Maximum Placement Fee”

A temporary help service firm may charge a placement fee to a third-party client should it choose to hire a temporary laborer as an employee. The placement fee must not exceed the total daily commission rate that the temporary help service firm would have received from the third-party client for that laborer for a 60-day period, reduced by the daily commission rate actually received for that temporary laborer in the preceding 12 months. If this number is positive, that is the maximum placement fee that may be charged. If it is negative, no fee may be charged for the placement of the worker.

Looking Ahead

While these proposed rules may not be in their final form, they do offer temporary help service firms and their clients necessary and valuable information to ensure compliance with the key requirements of the Bill of Rights provisions, which take effect August 5, 2023. Staffing agencies and any employers that utilize the services of temporary workers are advised to consult with counsel on the implications of this new law and how to best navigate the potential hurdles that lie ahead.

​1 A comparator is a third-party employee performing the same or substantially similar work as the temporary employee.