Illinois now requires Long-Term Temps to be paid like Employees

Both Illinois employers that contract with temporary labor service agencies, and those agencies themselves that do business in the state, should review staffing contracts and ensure compliance with relevant policies and procedures under amendments to the Illinois Day and Temporary Labor Services Act signed by Governor J.B. Pritzker, which took effect immediately.

The amendments to HB 2862 hold that temporary workers assigned to a third-party client for more than 90 days are entitled to wages and benefits—or the cash equivalent of benefits—equivalent to the lowest-paid employee at that client who performs the “same or substantially similar” work. If no such person exists, temp workers must be paid the same as the lowest-paid employee with the closest seniority level to the temp.

For this to play out in practice, third-party clients are required, as requested by the labor service agency, to reveal “all necessary information related to job duties, pay, and benefits” of its own workers. Third-party clients that do not agree to such a request are considered to have committed a notice violation and can be penalized.

Temporary workers who believe they are not receiving the compensation to which they are entitled can first seek administrative claims with the Illinois Department of Labor. But if they exhaust that remedy, as an “interested party” they can sue under a new right of action established in the amendments, targeting both the temporary labor service agency and the third-party client.

While other recent changes to Illinois employment laws are not taking effect until January 1, these changes took effect immediately when Pritzker signed the law on August 4, with IDOL publishing emergency enforcement rules. The department will adopt permanent enforcement rules between now and January 1 that supersede the former.

While employers that contract with temp agencies need to update their contracts to comply with the amendments and new rules, temporary staffing companies should periodically request information about pay scales of their third-party clients based on the positions they tend to fill—as well as potentially amending contracts to require clients to notify them of substantial changes in pay or benefits.