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The Senate Labor Committee on Monday advanced a bill, opposed by NJBIA, that would set new legal requirements for temp staffing agencies but make third-party companies liable if the temp agencies they are utilizing violate wage payment or other provisions of the legislation.

“NJBIA is fully supportive of rooting out bad actors in the industry and ensuring that all workers are treated fairly and with respect for their hard work,” testified NJBIA Director of Government Affairs Alexis Bailey. “However, we have a few concerns with some of the legal liability being placed on third-party companies using temporary help service firms through this legislation.”

Bailey said the “private right of action” against third-party companies provided in S-511 could lead to many frivolous and class-action lawsuits that have the potential for large settlements that would drive up the cost of doing business.

“We are concerned that through these provisions, third-party businesses utilizing workers from a properly registered agency could get swept up in litigation if the temp agency does something wrong,” Bailey said. “We suggest revising this section to focus legal remedies more narrowly on the temporary help service firms themselves.”

Bailey also took issue with the effective date of the legislation, which would become law immediately upon being signed by the governor. “We believe extending the effective date would give third-party companies and temp agencies time to properly be in compliance with the various reporting and registration requirements created by this legislation,” she said.

The committee voted unanimously to release the legislation with one abstention from Senator Anthony Bucco, R-25, who expressed concerns about the need for amendments that address the liability concerns for third-party businesses.

“I hope we can get that section cleared up so that a well-intentioned bill doesn’t have unintended consequences,” Senator Bucco said.