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Temp workers bill a lightning rod for both sides of issue

Matthew Fazelpoor//October 3, 2022//

Temp workers bill a lightning rod for both sides of issue

Matthew Fazelpoor//October 3, 2022//

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Earlier this month, Gov. Phil Murphy conditionally vetoed Senate Bill 511/Assembly Bill 1474, also known as “The Temporary Workers’ Bill of Rights,” sending it back to lawmakers for some tweaks. The measure has been a lightning rod for both advocacy and opposition by various groups.

The temp industry is growing in New Jersey, fueled in large part by the boom in warehouse and e-commerce spaces around the state. Labor statistics estimate that more than 125,000 people are working for an estimated 100 licensed temp agencies with many more working for unlicensed agencies outside of regulators’ purview.

Low-wage workers can be vulnerable to improper treatment without typical workplace protections. The issue came to a head during the pandemic when a number of incidents were brought to light.

Gov. Phil Murphy announces the nomination of Douglas Fasciale to the New Jersey Supreme Court on Sept. 14, 2022.
“I applaud the bill sponsors’ efforts to improve the working conditions of our state’s temporary laborers,” Gov. Murphy wrote in his conditional veto of Senate Bill 511/Assembly Bill 1474, also known as “The Temporary Workers’ Bill of Rights.” “The protections contained in the bill will promote greater fairness in the industry, help address discriminatory labor practices, and promote racial and gender pay equity.”

“Temp workers should have equal rights, but because of their circumstances they are vulnerable to the abuse of basic labor rights,” said Sen. Joe Cryan, D-20th District, one of the bill’s co-sponsors. “They don’t deserve to be exploited for their labor, cheated out of their wages or denied their rights in the workplace. We respect all workers and expect them to be treated fairly.”

The measure would provide better protections for these workers while imposing certain requirements from temporary help service firms. Those firms would be required to register with the state Department of Labor and Workforce Development and third-party clients would be barred from employing temporary laborers through an unregistered firm.

It would impose information sharing and record retention requirements, requiring companies to disclose to the temp laborer, in their primary language, details on the work to be performed, including a description of the position, wages, terms of transportation and the length of the assignment, while spelling out hourly wages and deductions.

Firms would be prohibited from charging workers extra transportation fees to and from a designated worksite and from restricting a temporary laborer from accepting a permanent position with a third-party client. They would be required to meet the minimum wage threshold for employees, after meals and equipment deductions, with a rate no less than the average rate of pay and benefits of a third-party client’s permanent employees performing the same or similar work.

Temp workers would also be able to choose whether they will be paid on a weekly, bi-weekly or semi-monthly basis, while being provided with a minimum of four hours of pay in situations where they are contracted to work but not utilized.

And perhaps most important, the bill protects these workers from retaliation for exercising any rights under the measure.

Violations of the rules could result in daily $5,000 fines.

“I applaud the bill sponsors’ efforts to improve the working conditions of our state’s temporary laborers,” Murphy wrote in his conditional veto. “The protections contained in the bill will promote greater fairness in the industry, help address discriminatory labor practices, and promote racial and gender pay equity. I thus wholeheartedly support the overarching objectives of this bill and agree that we must act to better protect the temporary workers who are critical to our state’s economy.”

Murphy’s conditional veto did not request any sweeping or structural changes to the bill. Instead, he sought more technical tweaks and clarifications.

The governor called for the state to use a registration system within the Division of Consumer Affairs instead of creating a duplicative registration platform within the Labor Department. He also pushed for a $1 million appropriation to that agency, noting it will play a critical role in overseeing and enforcing the new protections.

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Murphy also suggested honing the definition of temporary laborers covered by the bill, tailoring it to those positions at the greatest risk of exploitation. He recommended authorizing payments via bi-weekly paychecks only – rather than letting the workers select their preferred pay period as the measure calls for – noting that many businesses have payroll systems that are likely ill-equipped to comply with multiple pay periods that vary by employee.

And finally, the governor recommended pushing back the bill’s effective date by an additional 90 days to give state officials more time to build out the necessary operations.

“Along with several technical amendments, these recommended substantive changes will advance the bill’s primary objectives without unduly hindering the availability of critically important temporary help service workers to businesses that need and benefit greatly from this pool of labor,” said Murphy.

Sen. Joseph Cryan
Cryan

Cryan said he will work with Murphy on a revised bill. “The governor shares the same goal of providing basic rights to temporary workers,” Cryan said in a statement after the veto. “This is an invisible workforce that has been left vulnerable to exploitation and mistreatment. They have been cheated out of their wages, denied benefits, forced to work in unsafe conditions and charged unjustified fees by employers. The Bill of Rights will help correct these wrongs of the past, so these workers are treated fairly.”

“Gov. Murphy’s conditional veto makes important technical changes to streamline enforcement and clarify protections for temp workers,” said Nidia Rodriguez, a temp worker and member of Make the Road NJ, a group that has pushed for the measure. “Temp workers have been subject to wage theft, abuse and exploitation for far too long. During the pandemic we risked our lives to do essential work without adequate protections. Four temp workers from one of New Jersey’s largest temp agencies have died in the months since the bill last passed. We call on the Legislature to immediately bring S511/A1474 for a vote. We cannot wait for workers’ safety and livelihoods to be protected.”

Meanwhile, the measure has been opposed by business groups, including the New Jersey Staffing Alliance and the New Jersey Business & Industry Association.

“The New Jersey Staffing Alliance is very disappointed that Gov. Murphy didn’t make the substantive changes to the bill that we recommended,” the NJSA said in a statement. “The NJSA takes pride in our workforce and making sure that our employees are protected. The staffing industry’s sole job is to connect employers with workers, and this legislation makes it extremely difficult, if not impossible, for the staffing industry to continue to provide hundreds of thousands of jobs in New Jersey. It is the Association’s position that this legislation cannot stand as is.”

NJSA emphasized the part of the bill that prohibits agencies from charging temporary workers for transportation the agency provides to and/or from work.

“Temp agencies that supply transportation for workers who don’t have their own should not have to bear the cost of it, as in almost every industry most employees are responsible for their own transportation,” the NJSA continued in their statement.

The group closed by saying the changes it sought have been ignored and it believes that the bill in its current form would lead to some staffing agencies closing their doors.

“Which could cause drastic reductions in the 500,000 temporary employees New Jersey staffing firms supply to every industry and job category in the state that generate almost $6 billion in the state’s economy,” said NJSA. “We are looking for fairness in the regulations that are presented so we can continue to work together for a reasonable compromise that will benefit temp workers, employers and the staffing agencies that bring them together.”

Both the NJSA and NJBIA called the provision requiring temporary workers receive the same compensation and benefits as their equivalent employee counterparts “problematic.”

“We remain steadfast in our position that that condition is unworkable,” said Alexis Bailey, NJBIA vice president of government affairs. “Temp agencies contract with multiple businesses that all have various benefits packages. These packages can encompass everything from 401(k) matches and health insurance to vacation days and life insurance policies. It will be a logistical impossibility for temp agencies to administer these extensive benefits that vary so widely across businesses to thousands of temporary workers.”

Bailey pointed out that this “extreme benefit provision” is not included in similar legislation passed in other states.

“The conditional veto also does not disrupt the path to litigation for third-party businesses that use workers from a properly registered temporary help service firm – even if the firm unknowingly or knowingly commits violations that are out of the business’s control,” said Bailey. “As this bill only narrowly passed the Senate and the Assembly before reaching the governor’s desk, we look forward to continuing to work with the sponsor and the lawmakers to bring better fairness and balance to New Jersey’s business community.”