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Partial Industry Win Possible in New Jersey War on Staffing

But major problems will remain unless appeal succeeds

Last Year Staffing Legal News reported on New Jersey's "Temporary Worker Bill of Rights," which is actually a transparent attempt to destroy a large segment of industrial staffing in the state. The law requires industrial staffing firms to provide temporary workers with pay and benefits equal to the pay and benefits of equivalent full-time workers at their clients. This in turn requires the clients to disclose their pay and benefit rates to the staffing agency, something most clients are reluctant to do. And then the agency mark-up would render temporary workers more costly than the clients' regular workers. A Federal court last summer reviewing the evidence agreed that the bill would cause irreparable damage to the staffing industry in the state, with many firms likely to cease doing industrial staffing there altogether. The court nevertheless upheld the wage matching requirement. That ruling is under appeal.

Recently, the Plaintiff trade organizations filed a motion in the case challenging the "equal benefits" portion of the law on the grounds that benefits are controlled by the federal Employee Retirement Income Security Act ("ERISA") and therefore the state cannot regulate in this manner. The court immediately issued a "Show Cause Order" requiring New Jersey to give a reason why the court should not rule that the benefits requirement is invalid. This suggests that the Court is likely to strike down the equal benefits requirement, as happened earlier this year in a challenge to a similar law in Illinois:

ASA-Supported Staffing Agencies Overturn Benefit Matching Requirement in Illinois
In a significant, albeit partial, victory, the ASA affiliated Staffing Services Association of Illinois and several staffing firms have won a federal court injunction halting the enforcement of Illinois’ recently imposed requirement that industrial staffing firms match their clients’ benefits.

A partial victory is better than no victory, but the onerous wage-matching requirement still stands and, absent success on appeal, large segments of industrial staffing in New Jersey are likely to disappear or be greatly diminished.

Supporters of the bill portrayed it as a civil rights measure designed to uplift downtrodden immigrants and minority temporary workers. SLN is suspicious that other motives may be at play, such as assisting union organizing efforts by eliminating less-easily organized temp workers from the factory floor. While success in doing this may assist some workers who manage to obtain direct employment with the clients, it will hurt those who value (or need) a flexible employment solution. When the dust settles, it will be interesting to get the take of these workers who can no longer find flexible employment in New Jersey. Also, one wonders if will ever again make sense to build a warehouse or manufacturing plant in the Garden State.