Today, Governor Murphy signed legislation that will dramatically impact the temporary staffing industry and its workers in the State of New Jersey.

As expressed in the law’s text, the motivation behind the legislation is to bring regulation to an industry that has been largely unregulated and address abuses directed toward temporary workers.  Unions and worker’s rights advocates are celebrating the law’s passage.  Temporary staffing agencies and their clients oppose the bill and continue to express their strong concerns because several of the law’s provisions are likely to create significant financial hardship and confusion upon implementation.    

The law contains more than ten separate sections creating new mandates related to employee disclosure, recordkeeping, registration, transportation, and other categories.  These disclosure and notification requirements and related penalties can apply to temporary staffing agencies as well as their clients.

In addition to new disclosure and recordkeeping requirements that will increase agencies’ and clients’ operating costs, the law prohibits both the temporary staffing agency and the client from charging the temporary employees for transportation to and from worksites.  Similarly, agencies cannot charge workers for meals or equipment if those charges cause wages to fall below minimum wage.   Temporary staffing agencies are also required to employ personnel, or work with personnel, who can effectively communicate with temporary workers in their native language. 

The law limits the amount a temporary staffing agency can charge when a worker transitions to a client’s payroll.  Further, the law requires temporary workers to receive the same rate of pay and benefits as a client’s direct employees working the same position.

Although temporary staffing companies are already required to register with the State, this law appears to increase the costs associated with that registration process.  It is not clear yet how the current registration process and new registration process may differ beyond the higher fees and insurance requirements.  The State will maintain a list of properly registered temporary staffing companies and clients who work with unregistered or suspended temporary staffing companies will face penalties.

The law permits employees to dictate their pay schedule.  In other words, the temporary workers have the ability to tell the staffing agency whether they want to be paid weekly, bi-weekly, or otherwise.  Staffing agencies will need to determine whether their payroll systems can provide for this type of flexibility.

Each of these provisions will result in additional costs to both staffing agencies and their clients.

Temporary staffing agencies, their clients, and those third parties working with them should prepare to devote resources, time and attention to making sure they are ready to implement the many reforms within this law.