(The Center Square) — New Jersey is facing a federal lawsuit filed by a coalition of staffing agencies challenging a recently approved state law that provides protections for temporary workers.
The lawsuit, filed in U.S. District Court on May 5 by the New Jersey Staffing Alliance, argues that the law signed by Gov. Phil Murphy in February is unconstitutional and asks a judge to block it from going into effect in August.
In a 25-page complaint, lawyers for the plaintiffs said the law is a “threat” to New Jersey’s temporary staffing industry, and the new requirements for record keeping, record producing, payment requirements and placement fee caps would be an “extraordinary burden and expenditure” for staffing businesses.
“The Legislation will put members out of business,” they wrote in the complaint. “The amount of time and labor that will be spent with regard to compliance with this Legislation will in all probability be cost prohibitive and ultimately destroy the temporary staffing industry in New Jersey.”
The plaintiffs said they are also concerned about a provision in the legislation requiring temporary staffing employees to be paid the “average pay and benefits or monetary equivalent” of similarly situated employees of the third-party clients.
“While there are many provisions in the Legislation that create significant difficulties, this provision creates the most egregious impact,” they wrote in the complaint. “This provision in and of itself can bring the temporary staffing industry in New Jersey to a halt.”
Under the new law, staffing agencies would be required to provide workers with schedules, descriptions of the work they are to perform, and details about worker’s compensation insurance in their native language. It also bars firms from requiring workers to pay for transportation to and from a work site and requires them to pay temp workers for at least four hours worth of work, even when clients decide not to utilize them. Agencies face fines of up to $1,000 for each new law violation.
Approval of the legislation was partly driven by the fatal crash last year involving a van full of temporary workers that killed four and injured eight others on the Palisades Interstate Parkway.
Labor rights and immigrant groups pushed hard to pass the bill in response to reports about unsafe workplace conditions for the state’s temporary workers.
But the coalition argues in the legal challenge that the new law will drive up costs for temping agencies and their clients, ultimately costing workers jobs.
Several business groups, including the New Jersey Business & Industry Association, have signed onto the lawsuit in support of the staffing coalition’s complaint.
Alexis Bailey, NJBIA’s vice president of government affairs, said the legislation, while “well intended,” contains a “lack of balance and increased burdens would crush legitimate New Jersey staffing agencies – and ultimately take away opportunities from the temp workers it aims to protect.”
Both sides of the legal fight are expected back in court on June 13, when a federal judge will consider the request for a preliminary injunction to block the law from going into effect.