More Changes to the Illinois Day and Temporary Labor Services Act

By Allison Sues, JD, Senior Employment Law Counsel
Published October 1, 2024

Perhaps third time’s a charm when it comes to the Illinois legislature settling on language and requirements for the Equal Pay and Benefits provisions of the Illinois Day and Temporary Labor Services Act (“IDTLSA”). The original requirements and subsequent developments, including an initial amendment and court injunction on certain provisions of this law have been previously covered in our newsletter.  

By way of a quick background, the IDTLSA requires that staffing agencies pay temporary workers “equivalent pay and benefits” to comparable directly hired employees at the host employer once the temporary worker has worked a certain amount of time at the host employer.  

The Equal Benefits provision of this law is not currently in effect as it remains enjoined while a legal challenge to the IDTLSA remains pending at the Seventh Circuit Court of Appeals. Now, the newest amendment has gone into effect, and it changes and clarifies key points on the Equal Pay requirements of this law.   

• New 720 Hour Threshold to Reach the Equal Pay Requirement. The IDTLSA originally required temporary staffing agencies to pay temporary workers equivalent pay and benefits to a comparable employee of the host third-party employer once the temporary worker had worked at the host employer for 90 days. The first round of IDTSLA amendments extended the date from which the employer would begin counting the 90 days, with the clock starting on April 1, 2024. The amendments do away with the 90-day barometer and replace it with a new threshold – the equal pay provision kicks in once a temporary worker works 720 hours at the host employer in a 12-month period. The amendments did not change the starting date to begin counting towards this threshold, which remains April 1, 2024. 
• Three Methods Available to Use in Determining the Rate of Equal Pay. The newest version of IDTLSA allows for three different options in determining “equivalent pay.” First, the temporary agency may request the host employer to provide wage information on the lowest paid of the host employer’s direct employees who is similarly situated to the temporary worker both in job assignment and seniority. This option is not available if the comparable directly hired employee is subject to a collective bargaining agreement. Second, if there are no employees with similar job duties, the agency may ask the host employer to provide wage information on the lowest paid, directly hired employee with the closest level of seniority. Third, the temporary agency may use its sole discretion to determine the rate of equivalent pay based on the median wages of workers in the same or substantially similar job classification and in the same metropolitan or non-metropolitan area of Illinois as reflected in the most recent Occupational Employment and Wage Statistics Survey. The Illinois Department of Labor will post a link to this publication and a link to guidance on analyzing this information. Agencies using this new method should note that once a temporary worker has worked for the host employer for 4,160 hours during a 48-month period, the wages should be determined based on the 75th percentile of wages from this data. 
• Clarifying Responsibility in Complying with the Equal Pay Requirements. The newest amendments clarify that it is the temporary worker agency that bears the ultimate responsibility for determining the rate of equivalent pay and providing the correct wages. The host employer meets its obligations by providing the following information to the temporary agency upon request: “all necessary information related to job duties, working conditions, pay, seniority, and benefits it provides to the applicable classification of directly hired employees.” 

These newest amendments to the IDTLSA also provide additional requirements on temporary labor agencies, including that they send certain notices to assigned temporary workers at the time of dispatch, as well as when they are assigned to a host employer with a labor dispute – now defined as disputes involving a strike, lockout, work stoppage, picketing, bannering, or hand billing. 

Confusing? HR Source members with questions about the ever-changing IDTLSA should reach out to us through the HR Hotline Online or at 800-448-4584.