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October 20, 2017Client Alert

New Illinois Law Imposes More Legal Requirements On Staffing Agencies

Last month, Governor Bruce Rauner signed into law House Bill 690, which amended the Illinois’ Day and Temporary Labor Services Act to impose additional requirements on staffing agencies. 

History of Bill:  House Bill 690 was first introduced in January 2017.  In its original form, House Bill 690 faced intense opposition based on the operational burdens it would have imposed on staffing agencies.  For instance, as originally drafted, the Bill required that temporary workers receive the same average rate of pay as full time employees performing substantially similar work.  The original draft of House Bill 690 also required that staffing agencies disclose its operating expenses and client fees.  While these two requirements, and others, were removed from the final version of House Bill 690, the Bill still imposes a number of new requirements on staffing agencies, which should not be ignored.

Key Provisions:  As signed into law, House Bill 690 requires staffing agencies to:

  1. Provide information regarding the types of equipment, protective clothing, and training required to perform the assigned work.  This information must be included in the statement provided to workers at the time of dispatch.
  2. Provide return transportation for temporary workers.  However, two exceptions exist to this new mandate.  First, this requirement is only imposed on those staffing agencies that already provide transportation for workers to their worksites.  Second, temporary workers can agree to waive the provision of return transportation, but this waiver must be provided prior to leaving for the worksite. 
  3. Not charge for the expense of conducting any consumer reports, criminal background checks, or drug tests.  This prohibition applies to staffing agencies, as well as client companies.
  4. Attempt to place current temporary workers into permanent positions when they are aware of a client company’s plan to hire a permanent employee for a similar position at the same worksite that the staffing firm currently provides temporary workers.
  5. Provide the Department of Labor a yearly report detailing the race and gender of each temporary worker assigned within Illinois.

Effective Date: Staffing agencies have until June 1, 2018 to implement these new requirements.

Recommendation for Employers: The passage of House Bill 690 presents an excellent opportunity for staffing agencies, as well as other employers that contract with staffing agencies, to conduct a self-audit to ensure compliance with the Illinois’ Day and Temporary Labor Services Act.  As a whole, the Act:

  • Requires registration and the payment of various fees;
  • Mandates specific postings and notices to employees;
  • Imposes extensive recordkeeping requirements on staffing agencies;
  • Prohibits excessive deductions for meal and equipment charges;
  • Regulates the transportation of workers;
  • Creates various other duties and responsibilities on staffing agencies and their third party clients; and
  • Prohibits retaliation.

The Illinois’ Day and Temporary Labor Services Act also imposes various levels of penalties for violations of its provisions, including fines up to $6,000, possible punitive damages, or revocation of the staffing agency’s registration with the Department of Labor.   In addition, the Illinois’ Day and Temporary Labor Services Act permits private lawsuits based on alleged violations of the Act.

Illinois businesses are encouraged to consult counsel in order to ensure they are in compliance with the Illinois’ Day and Temporary Labor Services Act, including its recent amendment by House Bill 690.

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