October 03, 2022

Proposed New Jersey Legislation Calls for Equal Pay For Temporary Workers

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Key Takeaways

  • The NJ legislature is currently considering a bill, along with revisions by Governor Murphy, which would require businesses to pay temporary workers no less than the average rate of pay and equivalent benefits offered to its permanent employees.
  • Under the proposed legislation, the temporary worker would be allowed to sue both the temp agency as well as the third-party company for wage violations or discriminatory practices, either individually or in class actions.

The New Jersey Legislature is now considering a revised bill from Governor Murphy, which would require businesses to pay temporary workers no less than the average rate of pay and equivalent benefits offered to its regular employees. The bill as originally passed by the New Jersey Legislature was conditionally vetoed by Governor Murphy, who has proposed revisions to the bill. Governor Murphy has made clear that if his revisions are accepted by the Legislature, he will promptly sign it into law.

The proposed bill aims to end discriminatory practices in the labor industry and promote gender and racial pay equity. Under the proposed legislation, the temporary worker would be allowed to sue both the temporary labor agency as well as the third-party company violations of the bills, either individually or in class actions. Additional affirmative protections for temporary workers in the bill include restrictions on charging workers for transportation to or from worksites and prohibiting workers from accepting positions with a third-party client. The legislation also imposes significant recordkeeping duties on the temporary labor agencies by requiring them to keep records of each temporary worker provided to a third party to perform work, including: the location of the worksite, the type and number of hours worked, the hourly rate, a copy of any contract pursuant to which the temporary worker is performing work, and the deductions from the laborer's compensation. Businesses and temp agencies that violate the law will be subject to civil penalties, including financial penalties recordkeeping violations, with each day of non-compliance constituting a separate offense.

Under Governor Murphy's proposed revisions, the bill would only apply to occupations "most vulnerable to exploitation" such as food service work, construction labor, security guards, building maintenance, cleaning, landscaping, factory, and transportation work. Job types not covered under in the proposed bill include healthcare workers, business and finance professionals, salespeople, and information security and security professionals, among others. In addition to other revisions, the Governor has recommended the appropriation of one million dollars to the Department of Labor and Workforce Development to ensure "robust enforcement" of the bill's protections.

The proposed legislation is consistent with previous pro-labor laws passed by the New Jersey Legislature during Murphy's tenure as governor. Since 2018, Governor Murphy has signed into law multiple bills calling for higher wages for workers, expansions of the state's paid family leave program, equal pay for women and minorities, and an end to the misclassification of workers as independent contractors.

Temporary labor agencies and third-party companies using temporary labor agencies should continue to monitor the status of this proposed legislation and consult counsel to prepare for any potential recordkeeping and compensation changes that will be required should this bill be signed into law.

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