As previously reported, on February 6, 2023, the State of New Jersey enacted the Temporary Workers' Bill of Rights ("TWBR"). The TWBR adds greater protections and benefits for temporary workers in the state by imposing a variety of requirements on the companies that hire temporary workers as well as the staffing agencies who supply the workers. On September 16, 2024, the New Jersey Department of Labor and Workforce Development ("NJDOL") issued regulations (the "Regulations") under the TWBR.
Notice Requirements
The Regulations mandate specific notice requirements for temporary help service firms concerning the obligations imposed by the TWBR. At the time a temporary help service firm dispatches a temporary laborer to work at a job placement, the temporary help service firm must provide the worker with an assignment notification statement using a form available on the Division of Wage and Hour and Contract Compliance's website. The notification statement must be provided in English and in the language identified by the employee as the employee's primary language. It must include the following information:
- Whether the position offered will require any supplies, a
description of the supplies required, whether the supplies will be
provided by the temporary help service firm or the third-party
client at no cost to the temporary laborer or, if provided by the
temporary laborer, the approximate cost;
- Whether the position offered will require any licenses and a
description of the licenses required; and
- The terms of transportation offered, if any.
The temporary help service firm must provide the statement to the temporary laborer in the appropriate manner as detailed under the TWBR. For example, where the assignment is accepted remotely, such as by text or email, the statement should be provided by text or email. However, if accepted by telephone, the temporary laborer has the option of receiving the assignment notification statement remotely, such as by text or email, or physically from the temporary help service firm's office.
For multi-day assignments, the temporary help service firm is only required to provide the assignment notification statement on the first day of the assignment and then at any time the terms change.
Recordkeeping Requirements
In addition to the lengthy recordkeeping requirements already in place for temporary help service firms, the Regulations add requirements for third-party clients. Third-party clients must maintain the name, address and telephone number of each worksite of the temporary laborer, the date the laborer was sent to each worksite, the name and nature of the work performed by the laborer, and the number of hours worked and pay received by the laborer. The third-party clients are also required to remit these records to the temporary help service firm within seven days after the last day of the work week.
Pay Equity Requirements
The TWBR also imposes certain pay equity requirements on temporary help service firms. Under the TWBR, temporary laborers cannot be paid less than the average rate of pay and average cost of benefits of the employees of the third-party client who perform the same or substantially similar work requiring equal skill, effort, and responsibility under similar working conditions.
The Regulations set forth a detailed means of calculating the minimum hourly rate of pay owed to the temporary laborer by the temporary help service firm. Before calculating the minimum hourly rate of pay, the temporary help service firm must first receive a listing of the hourly rate of pay and hourly cost of benefits for each employee deemed a comparator by the third-party client. A "comparator employee" under the Regulations is defined as "an employee of the third-party client to which the temporary laborer is assigned, who is performing the same or substantially similar work to that of the temporary laborer at the same time the temporary laborer is assigned to the third-party client, on a job the performance of which requires equal skill, effort, and responsibility to that of the temporary laborer, and which is performed under similar working conditions."
If the comparator employees receive a salary, the hourly rate of pay for the comparator employee is calculated by dividing the annual salary by 2,080 hours. The same applies for calculating their cost per hour of benefits.
To determine the minimum hourly rate of pay for the temporary laborer, the temporary help service firm must calculate the average hourly rate of pay by taking the sum of the hourly rates of pay for all comparator employees and dividing it by the number of comparator employees. The same applies for calculating the cost per hour of benefits of the comparator employees. To reach the minimum hourly rate of pay owed to the temporary laborer, the temporary help service firm must subtract the cost per hour of benefits provided to the temporary laborer from the sum of the average hourly rate of pay of the third-party client's comparator employees and the average cost per hour of benefits of the third-party client's comparator employees. This amount cannot be less than the minimum hourly wage rate required under New Jersey law.
The Regulations also detail what is considered "substantially similar" work for the sake of determining whether an employee serves as a comparator to the temporary laborer. The factors include skills, effort, and responsibility performed under similar working conditions, functions and duties of the role, similar job titles and job descriptions, and other factors such as experience, ability, education, and training needed to perform the job.
Placement Fee
The Regulations permit temporary help service firms to charge third-party clients a placement fee when the third-party client employs a temporary laborer assigned by the firm. The placement fee cannot exceed the equivalent of the total daily commission rate that the temporary help service firm would have received over a 60-day period, reduced by the equivalent of the daily commission rate that the temporary help service firm would have received for each day the temporary laborer would have performed work for the temporary help service firm in the preceding 12 months.
The Regulations provide a detailed method for determining the maximum placement fee that a temporary help service firm may charge. To calculate the maximum placement fee, the temporary help service firm must:
- Calculate the daily commission rate by subtracting the daily
wages and benefits paid by the temporary help service firm to the
temporary laborer for work performed on assignment for the
third-party client from the total daily amount paid by the
third-party client to the temporary help service firm for the
services of the temporary laborer;
- Next, multiply the amount arrived at by 43 (8.6 work weeks,
multiplied by five workdays per week, for a total of 43 workdays)
to arrive at the "equivalent of the total daily commission
rate that the temporary help service firm would have received over
a 60-day period";
- Then, multiply the amount arrived at in step 1 above by the
number of days the temporary laborer performed work for third-party
clients of the temporary help service firm during the 12-month
period immediately preceding the date upon which the temporary
laborer accepted an offer of employment by the third-party client;
and
- Subtract the amount arrived at in step 3 from the amount arrived at in step 2.
A temporary help service firm may only collect a placement fee if the amount arrived at in step 4 is a positive number greater than zero.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
