Recent Changes to the Illinois Day and Temporary Labor Services Act

10.26.23

Effective August 4, 2023, several significant amendments were made to the Illinois Day and Temporary Labor Services Act, 820 ILCS 175/1, et seq. (the “Act”), which governs the rights and responsibilities of workers and employers in the temporary labor industry in Illinois. The Illinois Department of Labor (“Department”) issued Emergency Rules effective August 7, 2023. Proposed Permanent Rules were published on August 18, 2023 and are expected to be issued in final form soon.

Current information about the Act can be found on the Department’s website.

The following are key changes to the Act and provisions of the Emergency Rules that are applicable to a company (“third-party client”) that utilizes the services of a temporary staffing agency (“agency”) for work other than professional or administrative.

1.     Work Verification Form: For laborers contracted to work a single day, third-party clients must provide laborers with a work verification form at the end of the workday that contains the laborers' name, work location, date and hours worked that day. The Department published a verification form that may, but is not required to be, used by third-party clients. The Department’s FAQs offer examples of compliance methods, such as a timekeeping system that allows a laborer to print daily records.

The amendments to the Act increased the penalties for noncompliance with the work verification form requirements to not less than $100 and not more than $1,500 for a violation, and not less than $500 and not more than $7,500 for a second violation.

2.     Employee Notice: An agency is required to provide a temporary laborer a notice at the time of dispatch containing certain information relating to the assignment. That information includes safety hazards and concerns at the third- party client and the identity of the representative of the third- party client to whom laborers should report safety concerns at the workplace. The third- party client must provide this information to the agency.

3.     Training/Worker Safety: On or before a temporary laborer’s first day of work at a third-party client each year, the agency must provide general safety training to each laborer for each third-party client to which the laborer is dispatched. The training must reflect all existing job hazards known by the third-party client or the agency, including those that have been reported to the third-party client or agency by a temporary laborer. Additional details about the required information is contained in the proposed rules. The training shall include information regarding actions taken by the third-party client to eliminate, control or otherwise mitigate or protect workers from the hazards, as well as what steps workers should take to avoid or control the hazards. This must include emergency evacuation and shelter-in-place procedures. The third-party client must cooperate with the agency in providing information necessary for the training.

The law also imposes job hazard documentation, review and disclosure obligations on the third-party client before a temporary laborer engages in work. Section 260.530 of the proposed rules contains additional details.

4.     Equal Pay for Equal Work: If a day or temporary laborer is assigned to work for a third-party client for more than 90 days (whether consecutive or not) in a 12-month period, then the day or temporary laborer must be paid at the same, or greater, rate of pay and receive the equivalent benefits as a directly hired employee of the third-party client with the same level of seniority and who performs similar work. Details and definitions are highlighted in the proposed rules.

If a day or temporary laborer's compensation rate must be increased due to the requirements of the Act, that compensation increase shall be effective as of the day or temporary laborer's 91st day of performing work for the third-party client. There is no minimum number of hours that work must be performed in order for a workday to be counted towards the 90-day total. The Department’s FAQ #6 contains an example of how to calculate the rate of pay for a temporary laborer after 90 days of work.

5.    Notice of labor dispute: A third-party client must notify an agency if a strike, lockout or other labor dispute exists at the location where the agency is dispatching day or temporary laborers. A laborer has the right to refuse an assignment when such labor dispute exists at the third-party client. If the laborer refuses the assignment, it is illegal for the agency or third-party client to retaliate against the laborer including by reprimand, discharge, suspension, demotion, denial of a work assignment or modifications to the terms and conditions of the assignment.

6.     Record-Keeping: Third-party clients are required to keep the following records and have them available for inspection by the Department during regular business hours at every location where day or temporary laborers are sent to work:
                a. All records related to all known safety hazards, including documentation of steps taken to mitigate or control the hazards; and
                b. Records relating to compensation of directly hired employees for comparison purposes.

7.     Placement Fees: Existing rules allowed an agency to charge a placement fee to a third-party client who employs a day and temporary laborer. The fee cannot exceed the total daily commission rate the agency would have received over a 60-day period reduced by the total amount of the daily commission rate the agency has received each day the laborer has performed work for the agency in the preceding 12 months. Emergency Rule Section 260.470 provides an example of how the placement fee may be calculated. The Emergency Rules provide a temporary laborer or third party client with the right to file a complaint with the Department if they have knowledge that an agency has charged a placement fee or threatened to charge a placement fee in violation of the Act.

8.     Anti-Retaliation: The Act now includes anti-retaliation provisions that prohibit third-party clients from taking adverse action against temporary labor workers who exercise their rights under the Act. This includes reporting labor violations, seeking workers' compensation, participating in related legal proceedings and refusing an assignment due to a labor dispute at the work site.

9.     Duty to Verify Agency Status: The prior version of the Act required a third-party client to verify an agency’s status with the Department before entering into a contract with the agency, and on March 1 and September 1 of each year. A third-party client may rely on the Department’s website for a list of agencies which are registered as day and temporary labor service agencies. The amendment increased the penalties for a violation of this duty, to not less than $100 and not more than $1,500 for each offense. Each day during which a third-party client contracts with an agency not registered with the Department constitutes a separate and distinct offense.

10.     New Penalties: The amendments to the Act have increased penalties for non-compliance. A third-party client found to have violated any provision of the Act is subject to a civil penalty of not less than $100 and not more than $18,000 for the first violation. Any subsequent violation is subject to a penalty of not less than $250 and not more than $7,500.

If you have any questions about the amendments to the Act, the Act’s implementing rules or how to come into compliance with the Act, please contact Amy M.Gibson, agibson@agdglaw.com, 312-755-3154.