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The Illinois Department of Labor (the “IDOL”) has reached the final stages of the rulemaking process related to recent <a href="https://www.vedder.com/insights-events/new-illinois-legislation-to-make-using-temporary-labor-costlier-and-more-complicated/" target="_blank" rel="noreferrer noopener">amendments</a> (the “Amendments”) to the Illinois Day and Temporary Labor Services Act (the “DTLSA”). The Amendments, which collectively have been in effect since 2024, drastically expanded the obligations of temporary staffing agencies and the client companies they serve. The Amendments have already faced several legal attacks (the most recent of which resulted in a finding that their “interested party” provision unconstitutionally usurps the Illinois Attorney General’s exclusive right and obligation to represent the State) as explained <a href="https://www.vedder.com/insights-events/circuit-court-holds-interested-party-may-not-sue-to-enforce-day-and-temporary-labor-services-act-rules-part-of-dtlsa-unconstitutional/" target="_blank" rel="noreferrer noopener">here</a>.

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The IDOL’s proposed rules seek to clarify how businesses must comply with certain of the Amendments, and staffing agencies and their clients should prepare to comply fully with them.

Here are five major highlights from the IDOL’s proposed rules:

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Under the Amendments’ “equal pay” requirements, when a day or temporary laborer (“laborer”) is assigned to work at the same client company for more than 720 hours in a 12-month period, they must be paid at least as much as either: (1) a similarly situated direct employee of the client, or (2) employees of a similar classification based on relevant Bureau of Labor Statistics (“BLS”) data. The proposed rules clarify a default rule that a laborer’s pay should be calculated commensurate with a similarly situated client company employee unless the client directs its staffing agency to apply BLS data.

The proposed rules also require client companies, upon request, to provide staffing agencies with all information needed to calculate their laborers’ pay under the equal pay requirements before the laborers’ next pay period after attaining the threshold of 720 working hours.

Significantly, the current proposed rules do not address one of the Amendments’ most controversial and problematic provisions, its benefits parity requirements, which mandate that laborers who meet the 720-hour-in-12-month threshold must receive benefits (or their cash equivalent) equal to similarly situated direct client company employees. The IDOL is expected to propose separate rules addressing those requirements in the near future, and they are certain to be informed by the challenges the benefits parity requirements have faced on the grounds that they are preempted by ERISA, as shown <a href="https://scholar.google.com/scholar_case?case=8024760869891035958&amp;q=Staffing+Services+association+of+illinois&amp;hl=en&amp;as_sdt=400006" target="_blank" rel="noreferrer noopener">here</a> and <a href="https://scholar.google.com/scholar_case?case=5620159066777300938&amp;q=Staffing+Services+association+of+illinois&amp;hl=en&amp;as_sdt=400006" target="_blank" rel="noreferrer noopener">here</a>.

The Amendments impose extensive notice obligations on staffing agencies. When a staffing agency dispatches a day or temporary laborer to an assignment, it must provide the laborer with an “employment notice” disclosing detailed information about the assignment. The IDOL’s proposed rules require that the notice be signed by an authorized agent of the staffing agency certifying that it is true. The notice may be hand-delivered, emailed, texted, or delivered by U.S. mail.

The proposed rules also require staffing agencies to give an updated employment notice to laborers entitled to the DTLSA’s equal pay protections. The updated notice must explain how the laborer’s pay was calculated, and if the staffing agency calculates the laborer’s pay using a similarly situated employee comparator, the notice must identify the comparator’s seniority and straight-time hourly wage. Alternatively, if the staffing agency uses BLS data to determine the laborer’s pay, the notice must state the standard occupational classification used.

Right to Refuse Assignment Due to Labor Dispute

The IDOL’s proposed rules also clarify staffing agencies’ obligations under the Amendments to notify laborers of a labor dispute at an assigned workplace. Under this notice requirement, laborers are entitled to refuse assignments where an ongoing labor dispute is pending without prejudice to their eligibility for a different assignment.

Under the proposed rules, before staffing agencies may issue the requisite notice and dispatch a laborer to a client’s worksite, they must actually inquire of their client company whether a strike, lockout, picketing, bannering, handbilling, or work stoppage is occurring. After providing the required notice, the staffing agency must obtain a signed confirmation from each laborer that they received the notice and were informed of their right to refuse an assignment where labor unrest prevails. Staffing agencies must maintain records of their notices and their laborers’ signed statements.

In addition to requiring staffing agencies to inquire about labor disputes, the proposed rules also obligate client companies to affirmatively disclose such disputes to staffing agencies.

The DTLSA requires that staffing agencies provide free “general awareness safety training” to all laborers in their preferred language before dispatching them to a new assignment. The proposed rules expand this requirement in two significant ways.

First, they make safety training an annual requirement. Staffing agencies must provide this training before a laborer’s first day working at a particular worksite each year.

Second, the rules include extensive content requirements for the mandatory training. Training must cover “all existing job hazards” known to the third-party client or the staffing agency, and the proposed regulations list eight categories of hazards that, if present at the job site, must be discussed in training. The training must also cover client companies’ precautions to protect workers from such hazards and identify ways in which laborers can avoid or control the hazards, including emergency action plans, evacuation procedures, and shelter-in-place procedures.

Under the proposed rules, staffing agencies must maintain training records and signed statements from each laborer confirming that they received the proper training.

While the DTLSA Amendments also impose safety training requirements on third-party clients, the proposed rules do not significantly expand on those obligations as they are described in the Amendments.

Staffing agencies and their clients found to have violated the DTLSA are subject to civil penalties ranging from $100 to $18,000 for a first violation, or from $250 to $7,500 for subsequent violations. Staffing agencies that violate the DTLSA also risk suspension, denial, or revocation of their registrations. The proposed rules identify the following factors that the IDOL will consider when deciding the severity of a penalty: (a) the seriousness of the violation; (b) the economic harm to the laborer resulting from the violation; (c) any history of previous violations; (d) deterrence of future violations; (e) the violator’s efforts to correct the violation; and (f) any other factors that justice may require. In determining the amount of any civil penalty, the IDOL will also consider the employer’s size.

These are just a few of the ways that the IDOL’s proposed rules will impact DTLSA compliance and enforcement. While staffing agencies and their clients should already be complying with their obligations under the Amendments, they should also review their policies to prepare for full compliance with the IDOL’s anticipated regulations and keep a lookout for more regulations implementing other DTLSA Amendments.

If you have any questions about this article, please contact <a href="/people/allison-czerniak/" id="2297" target="_blank" rel="noreferrer noopener">Allison E. Czerniak</a> at <a href="mailto:aczerniak@vedder.com">aczerniak@vedder.com</a>, <a href="/people/alex-e-mastorides/" id="8730" target="_blank" rel="noreferrer noopener">Alex E. Mastorides</a> at <a href="mailto:amastorides@vedder.com">amastorides@vedder.com</a> or any other Vedder attorney with whom you have worked.

Illinois Department of Labor Prepares to Issue Rules Clarifying Expanded Obligations Under the Day and Temporary Labor Services Act

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