On Wednesday, Nov. 22, the American Staffing Association, the Staffing Services Association of Illinois, and three Illinois staffing firms were named plaintiffs in a lawsuit against the Illinois Department of Labor to immediately and permanently halt enforcement of new amendments to the Illinois Day and Temporary Labor Services Act. The complaint, which was filed in the U.S. District Court for the Northern District of Illinois, Eastern Division, alleges that the amendments violate the state constitution and U.S. Constitution—as well as federal statutes including the Employee Retirement Income Security Act, Affordable Care Act, and National Labor Relations Act.

On Aug. 4, Illinois Gov. Jay Pritzker signed into law HB 2862, which created the sweeping amendments to the act. Among other things, the amendments require covered temporary employees who work 90 days to receive the same pay and benefits as the client’s employees. The act does not apply to temporary professional and clerical workers. After the law was enacted, the Illinois Department of Labor issued administrative regulations and proposed rules. On Nov. 17, the governor signed an amendment to delay the effective date of the onerous “equivalent pay and equivalent benefits” provision until April 1, 2024.

The lawsuit notes that the amendments and accompanying rules and regulations are too vague and impose extraordinary burden, cost, and compliance risks on staffing firms, including exposure to statutory penalties and lawsuits from uninjured third parties.

The plaintiffs are represented by Chicago law firms Locke Lord LLP and Herschman Levison Hobfoll PLLC.

Through the remainder of the year in this space, ASA will recap the association’s efforts in successfully defeating or significantly mitigating proposed legislation that would have harmed the staffing industry.

In February, the Colorado legislature introduced and considered HB 23-1118, legislation that would have required businesses to offer additional work hours to existing employees before hiring a new employee, “including hiring through the use of staffing agencies.”

In written opposition testimony, ASA explained that the proposed legislation would deny jobs to thousands of temporary and contract workers—most of whom work full-time workweeks, enjoy the flexibility that temporary work offers, and otherwise would be assigned to work at peak seasons or to fill in for employee absences. These workers would be denied both the opportunity to work and a “bridge” that often leads to permanent employment. The testimony concluded that sacrificing the work opportunities for one group of workers, who generally work full-time workweeks, for the benefit of another group, some of whom may work part time, would make little sense.

ASA also voiced concerns through a meeting, arranged by lobbyist Jay Hicks of Hicks and Associates, with the bill sponsor. As a result of these efforts as well as strong opposition from the business community, the bill died when the legislature adjourned.

On Nov. 9, the Illinois legislature passed HB 3641, delaying the equal pay and benefits mandate under the Day and Temporary Labor Services Act. The mandate requires staffing agencies to provide temporary employees with equal pay and benefits after an employee has worked 90 days. HB 3641 provides that calculation of the 90-day waiting period will not begin until April 1, 2024.

The amendment was passed at the urging of ASA; the Staffing Services Association of Illinois; and the Illinois Search and Staffing Association, an ASA-affiliated chapter. Industry representatives met with assistant majority leader Rep. Jay Hoffman (D-113), who was instrumental in achieving the delay.

The delay in implementing the equal pay and benefits mandate will give the Illinois Department of Labor time to draft regulations clarifying how the mandate will apply. State legislators had sharply criticized the department’s proposed rules, saying they were “too vague to provide meaningful guidance.”

ASA filed extensive comments on the proposed regulations and will continue to pursue legislative fixes when the legislature reconvenes in January.

Through the remainder of the year in this space, ASA will recap the association’s efforts in successfully defeating or significantly mitigating proposed legislation that would have harmed the staffing industry.
Earlier this year, when the Ohio House of Representatives passed HB 33, the fiscal year 2023–24 budget bill, it contained language regulating nurse staffing firms—including language establishing rate caps and requiring nurse staffing firms to submit a schedule of rates to be charged to facilities.

When the bill was sent to the state Senate, ASA—along with member health care firms and Ohio lobbyist Andy Bowers of Park Street Law Group LLC—engaged key senators in an effort to have the nurse staffing-related language removed from the bill. Following several meetings and conversations, the efforts were successful as the bill was passed in the state Senate without the nurse staffing-related language.

When House and Senate leadership began negotiations to discuss what would be in the final bill, ASA remained engaged in the process and explained to leadership why rate caps and the reporting requirements would be harmful to the state’s health care system. Thanks to these and other efforts, the annual budget that was signed into law in Ohio did not include the nurse staffing-related language.

Through the remainder of the year in this space, ASA will recap the association’s efforts in successfully defeating or significantly mitigating proposed legislation that would have harmed the staffing industry.

In January, the Colorado legislature followed up its new law requiring the registration and licensure of all “supplemental health care staffing agencies” by introducing HB 23-1030. The bill, as originally drafted, prohibited agencies from including in a contract or agreement with a health care worker, nursing care facility, or assisted living residence a provision for liquidated damages, employment fees, or other compensation if the nursing care facility or assisted living residence hired the health care worker as a permanent employee either prior to or after the termination of the contract or agreement.

In a letter to the bill’s sponsors, ASA objected to the conversion fee ban because it would prohibit staffing agencies from recouping their recruiting and placement costs and allow clients to use them as a free employment agency. While testifying before the state senate’s business, labor, and technology committee, ASA vice president of government relations Toby Malara explained that these fees usually are paid on a sliding scale based on the hours the employee has worked on the agency’s payroll and are generally waived entirely if the employee is on the payroll for a period of time agreed to by both parties.

Following the hearing, ASA lobbyist Jay Hicks of Hicks & Associates arranged a meeting between interested parties and the committee chair. Representatives from the Colorado Health Care Association and Center for Assisted Living showed no interest in compromising, but the committee chair understood the association’s concerns and, at his direction, the bill was amended to allow for conversion fees to be charged during the first 30 days of a contract.

Today and through the remainder of the year in this space, ASA will recap the association’s efforts in successfully defeating or significantly mitigating proposed legislation that would have harmed the staffing industry.

Earlier this year, the Connecticut legislature introduced and considered HB 6859, legislation that would have required staffing agencies to provide employees with advance notice of work schedules and changes in schedules. The bill would have also required businesses to “make every effort” to schedule existing employees before hiring a new employee from a staffing agency. This was the sixth consecutive year that the state’s legislature considered such legislation.

In written opposition testimony, ASA explained that staffing firms could not comply with the bill’s requirement to provide a written estimate of the employee’s work schedule at the time of hire—including the average and range of hours the employee could expect to work each week plus the number, length, and days of their shifts—because staffing firms usually do not know that information at that time.

ASA also objected to the bill’s requirement that, before hiring a new employee from a staffing firm, an employer must “make every effort” to schedule its existing employees. ASA argued that every employer should be able, without delay, to obtain the help it needs in exigent circumstances. Many requests for temporary help could not be timely met, or met at all, if a business had to first canvass its workforce to identify individuals who might be willing and able to perform the work.

ASA lobbyist Kevin Hill of Powers, Griffin & Hill then arranged for a meeting with the bill’s sponsors to discuss the association’s concerns. Ultimately, the legislation was not called up for consideration and the bill died when the legislature adjourned in June.

Changes in Congress and several state legislatures made it almost impossible to predict what legislative challenges the staffing industry might face in 2023. With the height of the Covid-19 pandemic in the rearview mirror, it appeared that legislators would turn their attention to more traditional labor and employment issues, such as minimum wage increases, predictive scheduling, and pay equity.

Efforts to regulate health care staffing also continued in numerous states, occupying the majority of the association’s legislative activities. ASA also joined a lawsuit to fight back against a newly enacted “first of its kind” temporary worker pay equity law in New Jersey; some of its most troubling provisions then were adopted in Illinois. ASA further engaged on artificial intelligence measures as well as worker misclassification issues. Through it all, ASA secured major victories to ensure that its members could remain unencumbered in placing people in jobs.

As the calendar hits August, most state legislatures have adjourned, and those that have not are in the process of wrapping up proceedings for the year. However, in New Jersey and Illinois, there is still plenty of work being done when it comes to both states’ recently passed temporary worker rights bills.

In New Jersey, a federal court in late July denied the staffing industry’s motion to enjoin the Temporary Workers’ Bill of Rights Law enacted by the legislature earlier this year. The law, which applies to construction, light industrial, and other workers—but not professional or clerical workers—mandates temporary employee wages and benefits equivalent to those received by client employees performing similar work, limits conversion fees, and prohibits agencies from charging a fee for providing transportation, among other things.

Despite finding that the law likely will result in irreparable harm to many staffing firms, the court held that the industry’s arguments that the law is unconstitutional were unlikely to succeed at trial. In response to the court’s ruling, the group that brought the original lawsuit—the American Staffing Association; the New Jersey Staffing Alliance, an ASA-affiliated chapter; and the New Jersey Business and Industry Association—have filed a notice of appeal in the U.S. Court of Appeals for the Third Circuit appealing the district court’s denial of the parties’ request for a preliminary injunction. The parties will ask the Third Circuit to stay the district court’s action and enforcement of the statute while the appeal is pending.

Illinois Gov. J.B. Pritzker signed HB 2862, legislation that amends the Illinois Day and Temporary Labor Services Act to provide that temporary employees must be paid the same or similar pay and benefits received by equivalent direct hire employees after working for more than 90 calendar days for a client, among other things. ASA and its Illinois lobbyist Paul Rosenfeld met with legislators and secured modifications that significantly mitigate the impact of the amendments. ASA has submitted a letter to Gov. Pritzker urging the Illinois Department of Labor to delay implementing the law until final regulations are adopted with input from ASA and the Illinois Search and Staffing Association, an ASA-affiliated chapter.

HB 2862, which amends the Illinois Day and Temporary Labor Services Act, passed the Illinois legislature earlier this month and is on Gov. J. B. Pritzker’s desk awaiting signature. The amendments are scheduled to take effect July 1. Although ASA advocacy secured significant improvements in the bill that will reduce the administrative burden on staffing agencies, the new law will, among other things, require them to provide pay to their temporary employees who have worked more than 90 calendar days that is the same as or similar to pay and benefits paid to client employees working similar jobs. ASA has asked that those provisions be delayed until final rules are issued. In the meantime, however, staffing agencies will be expected to make good faith efforts to comply.

As the California legislature approached its deadline for moving bills from the house of origin to the second house, advocacy efforts led by ASA; California Staffing Professionals, an ASA-affiliated chapter; and California lobbyists Mike Robson and Bridget McGowan of Edelstein Gilbert Robson & Smith LLC were instrumental in derailing two California bills that would have had a major negative impact on the staffing industry.

AB 331 would establish various requirements for the use of automated decision tools (ADTs), including in the employment context. Among other things, the law would require that developers and users of ADTs prepare yearly impact statements addressing the use and validity of the ADTs, prepare governance programs to manage the risk of algorithmic discrimination, notify all persons subject to a consequential decision made by an ADT, and provide an alternative selection process for individuals who choose not to be subject to ADT evaluation.

SB 809 would eliminate an employer’s ability to consider an applicant’s conviction history save for a few very narrow exceptions, such as when considering applicants for jobs in industries the government deems sensitive in nature. Thus, companies outside those industries would be prohibited from considering applicant conviction history. For those companies permitted to consider conviction history, the bill would prohibit an adverse action against an applicant due to a delay in obtaining information regarding the applicant’s conviction history, even where that delay was outside of a company’s control.

The staffing industry worked with the California Chamber of Commerce to oppose or suggest amendments to the bills. For AB 331, amendments proposed by ASA would, among other things, limit the circumstances in which candidates may opt out of ADT evaluation, thereby ensuring that staffing firms could continue to place candidates in jobs in a timely manner. For SB 809, ASA joined a coalition of employer groups in opposing the bill on the basis that it would prohibit staffing firms from conducting criminal background checks for most jobs, including in cases where staffing firm clients require background checks of potential candidates.

Following weeks of discussions and negotiations, both AB 331 and SB 809 were moved to the inactive file, meaning they will not be taken up this year. Both bills can be reconsidered during the 2024 legislative session, and ASA will re-engage if necessary next year.