Illinois Requires Comparable Pay for Temporary Workers

On August 4, 2023, the Governor of Illinois signed HB 2862 into law, amending the Illinois Day and Temporary Labor Services Act (DTLS).

Under the amendments, temporary labor service agencies must pay temporary workers who are assigned to a third-party client for more than 90 days wages and benefits (or the cash value of such benefits) equal to the lowest-paid comparable direct-hire employee at the third-party client.

A direct-hire comparator means an individual with equal seniority status to the temporary worker who performs the “same or substantially similar” role under similar working conditions. If no comparator exists, the DTLS amendments permit temporary labor service agencies to give temporary workers wages and benefits (or the cash value of such benefits) equal to the lowest-paid direct-hire employee with the closest seniority level to the temporary worker.

To effectuate this change, if a temporary labor service agency requests, third-party clients must share “all necessary information related to job duties, pay, and benefits” of direct-hire employees with the temporary labor service agency. The DTLS amendments treat a third-party client’s failure to comply with such a request as a notice violation subject to damages or other penalties. 

The amended DTLS also expands the available remedies for temporary workers. In particular, the amendments establish a new right of action for any (broadly defined) “interested party” to sue temporary labor service agencies and third-party clients, provided, however, that they first exhaust their claims administratively with the Illinois Department of Labor (IDOL).

Notably, unlike other recent changes to Illinois employment laws that are slated to take effect on January 1, 2024, the DTLS amendments went into immediate effect. The IDOL has published emergency enforcement rules regarding the amended DTLS. These rules will expire on the earlier of January 1, 2024, or the date on which the IDOL adopts permanent enforcement rules.

To the extent they have not already done so, Illinois employers that contract with temporary labor service agencies should immediately review their staffing contracts and update their relevant policies and practices to comply with the DTLS amendments and emergency enforcement rules.

And temporary staffing companies doing business in Illinois should assess the positions, tasks, and responsibilities their workers assume and periodically request information regarding their third-party client’s pay scales. Temporary staffing companies may also want to consider amending existing contracts with clients to require clients to notify them of any changes in pay or material benefits.