Illinois’s Responsible Job Creation Act Creates Additional Requirements for Staffing Agencies

Illinois’s Responsible Job Creation Act, which will become effective June 1, 2018, amends the Day and Temporary Labor Services Act with the goal of strengthening staffing industry regulation. There are around 800,000 temporary workers in Illinois who will be affected by the Act. Among other obligations discussed below, the Act imposes, on day and temporary labor service agencies, an obligation to “attempt to place a current temporary laborer into a permanent position with a [third-party] client when the client informs the agency of its plan to hire a permanent employee for a position like the positions for which employees are being provided by the agency at the same work location.”

Key Provisions

Notice

An agency must notify a day or temporary laborer in writing, at the time of dispatch, of his or her schedule and the length of assignments.

This notice must include:

• the name of the laborer;
• the name and nature of the work to be performed and the types of equipment, protective clothing, and training that are required for the task;
• the wages offered;
• the name and address of the destination of the laborer;
• the terms of transportation; and
• “whether a meal or equipment, or both, are provided, either by the day and temporary labor service agency or the third party client, and the cost of the meal and equipment, if any.” 

Note: The Act also provides that laborers “shall be paid no less than the wage rate stated in the notice . . . for all the work performed on behalf of the third party client in addition to the work listed in the written description.” 

Transportation

• An agency may not charge a fee to transport a laborer to or from his or her designated work site.
• If an agency provides transportation for laborers to their jobsites, the agency must also provide transportation back at the end of the day, unless the laborer arranges for other return transportation.

Note: There are more specific and detailed regulations on permitted types of transportation to and from the work site.

Statement of Wages

An agency must provide a laborer with a detailed, itemized statement of wages, which must include:

• the name, address, and telephone number of each third party client at which the laborer worked;
• the number of hours he or she worked and the rate of pay;
• all deductions made from the laborer’s compensation either by the third party client or by the agency, and the purpose for the deductions, including for the laborer’s transportation, food, equipment, withheld income tax, withheld social security payments, and every other deduction; and
  • Note: The total amount deducted for meals, equipment, and transportation may not cause a day or temporary laborer’s hourly wage to fall below the state or federal minimum wage. 
• any other additional information required by the rules issued by the Illinois Department of Labor. 

Additional Provisions

• The Act prohibits an agency from charging any laborer for cashing a check issued by the agency for wages earned by the laborer who performed work through that agency.
• The Act prohibits an agency or third party client from charging a laborer for the expense of conducting a consumer report, a criminal background check, or a drug test.
• The Act makes an agency liable for a laborer’s wages if a laborer who is contracted by an agency to work at a third party client’s work site is not utilized by the third party client and does not work the shift. In such a case, the agency must pay the laborer a minimum of four hours of pay at the agreed upon rate of pay. But, if the agency is able to contract the laborer to work at a different location during that same shift, the laborer will be paid by the agency for a minimum of two hours of pay at the agreed upon rate of pay.

Penalties 

At the end of the workday, a third party client must provide a laborer with a work verification form, approved by the department, which “shall contain the date, the day or temporary laborer’s name, the work location, and the hours worked on that day. Any third party client [that] violates [this rule] may be subject to a civil penalty not to exceed $500 for each violation found by the Department. Such civil penalty may increase to $2,500 for a second or subsequent violation.”  

Additionally, a third party client is required to pay wages and related payroll taxes to a licensed agency for services performed by a laborer for the third party client according to payment terms outlined on invoices, service agreements, or stated terms provided by the agency. A third party client that fails to comply is subject to the penalties provided in Section 70 of the Day and Temporary Labor Services Act, which provides for a civil penalty not to exceed $6,000 for violations found in a first audit and a penalty not to exceed $2,500 for subsequent violations within three years.

The Act requires an agency to register with the Illinois Department of Labor. The department has the authority to assess a penalty of $500 per violation against any agency that fails to register with the department. Each day that an agency operates without registering with the department will be considered a separate and distinct violation of the Act.

The department “shall also adopt rules for violation hearings and penalties for violations of this Act or the Department’s rules in conjunction with the penalties set forth in this Act.”