Staffing Agencies Ask Court to Block Enforcement of Changes to Labor Act

January 25, 2024

Recently, staffing agencies subject to the regulations of the 2006 Illinois Day and Temporary Labor Service Act are challenging amendments to the Act. They, along with their trade associations, are urging a federal court to prevent the enforcement of these changes, which primarily dictate the management and payment of day laborers and temporary workers.

The Illinois Day and Temporary Labor Services Act, applicable to around 650,000 workers in blue-collar industries like warehousing and manufacturing, has been amended this year. While professional and clerical staffing services are exempt, the law has historically mandated registration for staffing agencies and provided minimum protections, such as a guarantee of at least four hours of pay for assignments. Recent amendments include a significant change: after 90 days on an assignment, temporary workers are entitled to pay and benefits not less than those offered to comparable employees directly hired by the client company.

Staffing agencies are now also required to inform workers about any strikes or labor disputes that occur at assigned work sites. Workers have the right to refuse such assignments without facing penalties from the staffing agency. The amended law also allows any “interested party,” defined as an organization monitoring compliance with laws, to sue a staffing agency for potential violations.

State Sen. Robert Peters, D-Chicago, who chairs the Senate Labor Committee and sponsored the legislation, noted a recent surge in employers using temporary labor to cut down wages and benefits for other workers. Temporary workers, he pointed out, often lack equal pay for equal work, finding themselves in “perma-temping” situations—repeatedly in temporary positions without being offered permanent jobs.

Governor JB Pritzker signed the legislation on Aug. 4, and additional measures were passed during the fall veto session, delaying the implementation of the equal pay provision until April 1, 2024. Pritzker signed this follow-up measure on Nov. 17.

The plaintiffs contend that calculating the value of benefits like life and health insurance or retirement contributions for other employees is impossible due to variations among individual employees. They further argue that state laws pertaining to health and retirement benefits are overridden by federal laws like the Affordable Care Act and the Employee Retirement Income Security Act (ERISA).

Additionally, the plaintiffs object to the provision allowing any “interested party” to sue and recover damages for alleged law violations. They argue that this provision exposes staffing agencies to an unlimited number of lawsuits, irrespective of whether the suing entity has suffered any damages.

For more information on how The Illinois Day and Temporary Labor Service Act could influence your business, contact the qualified attorneys at Rock, Fusco & Connelly, LLC