The New Jersey Department of Labor (“NJDOL”) recently issued proposed regulations that are designed to assist temporary employment agencies and their customers comply with New Jersey’s Temporary Workers’ Bill of Rights Law (“Law” or “Bill of Rights Law”). That Law went fully into effect on August 5, 2023.
One of the most controversial requirements of the Law is its pay equity requirement. This requirement mandates that temporary employees be paid not less than the average rate of pay and average cost of benefits, or the cash equivalent thereof, of employees of the third party client performing the same or substantially similar work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions for the third party client at the time the temporary laborer is assigned to work at the third party client. This provision raises many questions regarding how its requirements are to be satisfied, and a major portion of the proposed regulations are designed to aid in complying with this daunting statutory requirement.
The proposed regulations were issued by the NJDOL on July 21, 2023. These proposed rules are intended to assist in the implementation of Sections 1 through 7, and Section 10, of the Bill of Rights Law. The regulations were contemporaneously submitted by the NJDOL for publication in the New Jersey Register on August 21, 2023. The public comment period will end on October 20, 2023. Barring any changes made to accommodate any public commentary, the regulations will become law and go into effect a short time thereafter.
While these proposed rules may not yet be in their final form, they do offer temporary help service agencies and their clients necessary and valuable information to help ensure compliance and assist in deciphering key requirements of the Bill of Rights Law because the NJDOL will itself no doubt be referring to these proposed regulations as it begins to take steps to enforce compliance.
A key component of the proposed regulations is a detailed section that addresses many unanswered statutory questions surrounding the Bill of Rights Law’s temporary laborer pay equity requirement. The regulations specifically provide guidance on, inter alia, how a temporary employee’s hourly fee should be calculated, and how the determination should be made when evaluating which employees should be considered “comparables” based upon the similarity of the work to be performed.
One of the more interesting aspects of the proposed regulations is how they address the comparability issue.
The proposed rules on the comparability issue aim to resolve inherent workforce discrepancies by positing that substantially similar work should be viewed as a combination of effort and responsibility of work performed under similar working conditions. While experience, ability, education, and training required are factors in this analysis, the number of years of service (i.e., seniority) of a particular employee is not relevant to the determination of whether two jobs are substantially similar, even if the third-party client’s employee compensation system is seniority-based. Rather, what is most relevant is the number of years of experience that is required to perform a job. Additionally, the use of a merit system for compensation is not relevant to the determination of whether two jobs are substantially similar.
The proposed regulations are a key step forward in assisting both temporary employment agencies and their clients in attempting to comply with the requirements of this new Bill of Rights Law. Since the Law holds both the temporary employment agency and its client jointly liable for violations, it is imperative that each understands what the Law requires to ensure that compliance is achieved.
As these proposed regulations work their way through the administrative enactment process, we will continue to keep you updated on all relevant developments.