Understanding the Illinois Day and Temporary Labor Services Act

The state of Illinois recently implemented new and substantial changes for its employers and staffing agencies.

While the Illinois Day and Temporary Labor Services Act is not a new piece of legislation, the requirements will have a significant impact on how employers manage their contingent workforces. The new policies apply to all workers on temporary assignments, except for those clerical or professional in nature.

There’s plenty to unpack with the new regulations, including what’s considered retaliation and how temp-to-perm workers will be impacted.

Below, we tackle the big questions our clients are asking about temporary employee rights in Illinois.

What is the Illinois Day and Temporary Labor Services Act?

This Act has been in effect since January 2000, with various amendments over the years. Illinois recently amended the Act and issued emergency rules, both of which took effect August 4, 2023.

The Illinois Day and Temporary Labor Services Act and its amendments aim to provide labor and employment rights and protections to temporary workers.

The amendments and emergency rules make the following changes:

• Equal pay and benefits for staffing employees after 90 days
• Disclosure of placement fees to staffing employees
• Prohibiting staffing agencies from assigning a staffing employee to work at a work site that is the site of a labor dispute, unless the dispute has been disclosed and the employee has had an opportunity to refuse the assignment without retaliation
• Updates to wage notices and pay stubs
• More in-depth and specific training requirements

Are there any requirements about how frequently to update your staffing agency, specifically about the employees’ pay rates and comparable seniority?

The legislation does not currently address the frequency with which staffing agencies are to be provided with the pay rate of the lowest paid comparative employee, or lowest paid non-comparative employee with the closest seniority. In the absence of specific direction, we would recommend a partnership between clients and staffing agencies to establish a cadence that makes sense based on the client’s pay practices (i.e., quarterly, semi-annually, etc.).

In Illinois, if the temp worker is ended by the client prior to 90 days, is it considered retaliation?

Although you should discuss this with your employment counsel, Adecco is not interpreting the statute in a way to prevent temporary workers from being hired prior to 90 days. Indeed, the section of the statute that regulates conversion rates contemplates early conversions.

What if I’m not certain whether my temp workers are exempt? The definitions of "clerical" and "professional" as are not clearly spelled out in the act.

The exemption in the statute as it applies to “clerical” and “professional” roles is not defined and suggests that the plain meaning definition is broad because it refers to the roles as being clerical or professional “in nature.

The rules issued by the Illinois Department of Labor attempt to define professional and doesn’t define clerical at all. You should consult with your employment counsel as to the appropriate definition and align with your staffing company’s approach as well.

How can I ensure that I know which of my temporary workers are approaching 90 working days with their staffing agency?

Actually, the 90 working days is referencing the working days at a particular client, not the staffing company.

This means if you use multiple staffing companies, you as the client are actually in the best position to track associate working days and inform your staffing companies of same if they have a practice of hiring associates who have worked at your company previously through a different staffing company.

Your staffing supplier should collaborate closely with you to proactively track the tenure of all contingent workers during their assignments in Illinois.

I am not comfortable with the contingent workers at my site receiving higher pay (equal pay + benefits equivalent) than a permanent employee. What are my options?

You can avoid the equal pay and benefit requirement by requiring your staffing partner to end assignments at 90 days.

There are certainly other solutions that. For example, Adecco has established that by working closely with each of our clients on an individual basis, we can help identify the ideal approach that best caters to their organizational flexibility needs.

Are direct hire fees a part of the statute?

Placement fees for direct hire services are not regulated by the statute. If you are considering our direct hire service offering, we encourage you to get in touch with an Adecco representative for more information.

At what point can I convert my temporary worker to a permanent employee?

You may convert a temporary worker to a permanent employee at any time. However, it's important to be aware that conversion fees are indeed regulated by the statute, particularly when converting a worker who has been employed by the staffing agency – for less than 59 days into a full-time employee.

In such cases, a discounted fee is applicable. Adecco will utilize the specific calculation referenced in the statute.

We have workers who speak multiple languages. Do you have a recommendation on how staffing agencies are planning to conduct training given the new requirements?

The Act requires that temporary staffing firms provide their employees with, among other things, general awareness safety training for recognized industry hazards they may encounter at your worksite.

This training is to be completed in the preferred language of our employee and is compensable time. At Adecco, we work with a vendor who can provide training materials in written format in another language when requested.

We have multiple agencies at our site. How can we ensure each agency is utilizing the same process for Equal Pay for Equal Work?

Your staffing providers can comply with the Equal Pay for Equal Work provision of the legislation based upon information you provide to them.

You are required to provide the rate of pay of your lowest paid directly hired employee with the same level of seniority performing the same or substantially similar work on jobs – the performance of which requires substantially similar skill, effort, and responsibility, and which are performed under similar working conditions.

If there is no comparable employee, the legislation requires that you would provide your staffing providers with the hourly rate of the lowest paid employee with the closest level of seniority. Staffing providers are required to pay their employees the same, or greater, hourly rate.

With respect to benefits, your requirement is to provide staffing providers with information about your benefit plans so each agency can determine if the benefits they currently offer are equivalent. If they are not equivalent, you will need to provide the agency the cost of the benefits so that the agency can pay their contingent workers a cash equivalent payment.

The most effective way to ensure equality across all agencies is to move to a master vendor program. We encourage you to discuss this solution with your Adecco representative to see how it would benefit your organization.

How can staffing agencies determine if the benefits they offer are equivalent to the benefits we offer our permanent employees? Would this negate the requirement to provide the hourly cash equivalent of the actual cost of our benefits?

This is a common question being posed by the staffing industry and clients alike. The proposed regulations do not address the question and a recently added FAQ on the Illinois Department of Labor states the following, which further supports the need for third-party clients to provide their staffing providers with information about the benefits provided and hourly cost for each benefit:

“The day and temporary labor service agency is responsible for providing the benefits (or ensuring that the benefits are provided by the client). If both the agency and the third-party client provide some benefits, the two parties (client/agency) should communicate with and consult one another to address any overlap and ensure compliance with the Act. The Department cannot advise or guide day or temporary labor agencies or third-party clients about determining comparable benefits for laborers. Agencies and/or third-party clients should consult the statute for more information.”

It's possible that the final rules issued by the Illinois Department of Labor will further define the cost of benefit requirement.

Should I expect my cost of temporary labor to increase given these changes?

Yes. Essentially, if the pay rate increases, the bill rate would increase as well.

If your current agreement is markup based, it will not be subject to an increase in the markup rate. However, please note that the final total bill rate will increase in accordance with any upward adjustments to the pay rate.

What if I am uncomfortable sharing information about our company’s pay and benefits with a staffing supplier?

Legal obligations necessitate that companies maintain pay and benefits equity across all employees. Consequently, staffing partners require access to this information to guarantee that both your organization and the staffing firm are in compliance with legal requirements.

Pay-related information is often available online through job postings and staffing companies are usually contractually required to keep any client information confidential. Further, you do not have to produce names or other identifiable information of your employees to staffing companies in order for your staffing provider to comply with the law.

Guidance on labor law compliance

Compliance regulations are changing across the country. That’s why a partner like Adecco can help you navigate new and existing labor laws. As a national staffing agency, we understand the federal laws that govern how you do business, but we also understand the state and local laws that impact your operations as well.

With Adecco, you’ll have a partner in:

• Site safety
• Pay equity
• Wage notices
• Work verification forms
• Workers’ compensation claims

Reach out today and let’s talk about how we can help you address staffing challenges – and your compliance headaches.

This article is not meant to provide legal advice.  As is the case with any law or legal requirements, Companies should seek guidance from legal counsel.