In August 2023, Illinois Governor Pritzker signed sweeping amendments to the Illinois Day and Temporary Labor Services Act (DTLSA) that imposed new obligations on both the day and temporary labor service agencies employing covered laborers and the clients to whom those agencies contract for temporary labor. Recently, one of those amendments (indeed the key amendment) was temporarily enjoined by an Illinois federal court, calling into question the future impact such amendments will have on the temporary labor market.
As way of background, the 2023 amendments to the DTLSA included, most significantly, a requirement that laborers assigned to a client for more than 90 calendar days (in any 12-month period, whether consecutively or intermittently) must be paid, by the temporary agency, at least the rate of pay and equivalent benefits as the lowest-paid directly hired employee of the client with the same level of seniority at the client and performing the same or substantially similar work. Agencies may alternatively pay “the hourly cash equivalent of the actual cost benefits” in lieu of providing equivalent benefits. The Illinois Department of Labor (IDOL) defined benefits as including health care, vision, dental, life insurance, retirement, leave, other similar employee benefits, and other employee benefits as required by State and federal law. The pay and equivalent benefits obligation was one of several obligations placed on covered agencies and the clients with whom they contract. These amendments were due to take effect immediately and the IDOL passed emergency rules to provide guidance to employers on compliance. However, in September 2023 the Joint Committee on Administrative Rules (JCAR) objected to those rules. And then in November 2023, Governor Pritzker signed a new amendment to the DTLSA to delay the effective date of these new obligations until April 1, 2024.