HR Alert: Illinois Passes New Healthcare Regulations for Staffing Firms

By Kellen Economy, Chief Revenue Officer—Americas

Last week, the state of Illinois signed into law legislation that will place several new restrictions and requirements on healthcare staffing firms doing business in the state.

Prompted by the COVID-19 pandemic, travel nurses were instrumental in ensuring hospitals that were struggling to keep up with the influx of patients were fully staffed. In some places, the need for nurses was so urgent that they were offered short-term crisis contracts at rates double and triple what a staff nurse could expect to earn. Fast-forward to 2022, as the rate of hospitalizations for serious complications due to COVID-19 has begun to decrease, we are seeing travel nurse pay rates cut to pre-pandemic levels or lower.

“In an effort to protect nurses from drastic pay changes and what the state perceives as restrictive contracts, the new Illinois Healthcare regulations for Staffing Firms goes into effect July 1, 2022.

In an effort to protect nurses from drastic pay changes and what the state perceives as restrictive contracts, effective July 1, 2022, the Illinois law will:

  • Prohibit nurse staffing agencies from entering into non-compete agreements with the nurses and certified nurse aides (CNAs) they place at healthcare facilities.
  • Prohibit nurse staffing agencies from requiring the payment of liquidated damages, conversion fees, employment fees, buy-out fees, placement fees, and/or other compensation by any nurse or CNA they place if the nurse or CNA is hired as a permanent employee of the healthcare facility.
  • Require nurse staffing agencies to disclose new contracts with healthcare facilities to the Illinois Department of Labor within five business days of the effective date (protected from Freedom of Information Act).
  • Require nurse staffing agencies to pay the wage rates to nurses and CNAs identified on their contracts. Failure to do so allows the department to recover underpaid wages for the worker.

Currently, six other states are considering similar legislation to control wage reductions and contract restrictions for nurses: Maryland, Idaho, Indiana, New York, and Pennsylvania. People2.0 continues to monitor these regulations and will provide further HR Alerts as needed.

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