The state Senate narrowly passed legislation Monday that NJBIA says will result in burdensome requirements, and possibly lawsuits, on temporary staffing agencies and the third-party companies that utilize them.
One provision in bill A-1474/S-511, requires temporary workers to receive the same compensation and benefits as their equivalent employee counterparts.
NJBIA Director of Government Affairs Alexis Bailey said that condition was “unworkable” for employers.
“Benefits can encompass a wide range of offerings such as health insurance, 401(k) matches, life insurance policies and other unique features of compensation packages,” Bailey said. “Since temporary laborers are not employees of third-party businesses, they cannot be directly enrolled into the various types of benefit plans that may be provided to a third-party business’ permanent workforce.
“Additionally, temporary help service firms assign temporary laborers to various workplaces. It would not be administratively possible for them to execute these equivalent, extensive benefits packages based on offerings that will vary widely across companies.”
Although the legislation previously passed both houses by narrow margins on June 29, the bill never got to Gov. Phil Murphy’s desk due to a procedural error where the Senate and Assembly versions were never properly combined.
The legislation also calls for a “private right of action” against third-party companies that could lead to expensive class-action lawsuits with the potential for large settlements that drive up the cost of doing business.
It includes joint legal liability between third-party businesses and temporary help service firms for certain violations, Bailey said.
“This provision, coupled with the extensive legal remedies, will lead to the possibility of litigation for third-party businesses using workers from a properly registered temporary help service firm – even if that firm commits violations that could be out of their control,” Bailey said.
Bailey said the Commissioner of the Department of Labor already has extensive authority to penalize bad actors through current statutes.
“Today’s vote is a second chance for our lawmakers in the Senate to get this right and not put more burdens on New Jersey businesses,” Bailey said.
“While the intent of the bill is to create additional protections for temporary workers, the provisions in it range from concerning to completely unworkable for businesses which are often challenged enough to maintain their workforces. It’s important that the policymakers who voted ‘yes’ previously truly know the ramifications before re-casting their votes.”
The Senate vote was 21-15, the narrowest margin possible for passage of a bill in the Senate.