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Proposed Readoption: N.J.A.C. 13:45B

Authorized By: Division of Consumer Affairs, Reni Erdos, Director.

Authority: N.J.S.A. 56:8-1 et seq. and 34:8-54.
Calendar Reference: See Summary below for explanation of exception to calendar requirement. Proposal Number: PRN 2002-356.

Submit comments by December 6, 2002 to:

Stanley Fischer, Executive Director
New Jersey Division of Consumer Affairs
Office of Consumer Protection
PO Box 45025
Newark, NJ 07101

The agency proposal follows:


Pursuant to Executive Order No. 66 (1978), N.J.A.C. 13:45B is scheduled to expire on September 12, 2002. Pursuant to N.J.S.A. 52:14B-5.1, this date has been extended to March 11, 2003 by the filing of this proposal. The Office of Consumer Protection within the Division of Consumer Affairs ("The Division") has reviewed these rules and determined them to be necessary, reasonable and proper for the purposes for which they were originally promulgated. The Division proposes to readopt N.J.A.C. 13:45B in its entirety without change. The following is a summary of each of the 15 subchapters of N.J.A.C. 13:45B.

Subchapter 1 sets forth the purpose and scope for N.J.A.C. 13:45B and defines important words and terms which are used throughout the chapter.

Subchapter 2 sets forth the requirements for employment agency owners and the holders of an employment agency license. The rules state that employment agencies must obtain a license before they operate. Additionally, each person who places or refers job seekers or furnishes information as to where the help or employment may be obtained, or who personally manages, operates, or carries on the business of an employment agency, must obtain an employment agent's license. The rules also detail licensure, bonding, recording requirements, license holder obligations, and the requirement to file the agency's fee schedule with the Office of Consumer Protection.

Subchapter 3 provides employment agencies with rules as to primary and secondary locations for business locations. An employment agency must obtain a special permit in order to operate a secondary location.

Subchapter 4 sets forth examination subjects and specific rules for various classifications of employment agents, agencies that offer certain types of career counseling and employment agencies that provide temporary help.

Subchapter 5 states that consulting firms which offer temporary help services are required to register as consulting firms, not temporary help service firms. The rules also require consulting firms which offer temporary help services to post a bond of $1,000 with the Attorney General to ensure compliance with the Consumer Fraud Act, N.J.S.A. 56:8-1 et seq.

Subchapter 6 sets forth rules for the operation of entertainment agencies. Entertainment agencies are required to post their licenses in a conspicuous place within the agency itself. The subchapter also sets forth the contract requirements between the entertainment agencies and each performing artist and advertising guidelines for entertainment agencies.

Subchapter 7 contains the fee schedule for N.J.A.C. 13:45B and states that all licenses expire on January 1 of the year following their issuance, and all registrations expire on July 1 of each year.

Subchapter 8 states that all out-of-State businesses offering employment and personnel services in New Jersey must comply with the provisions of N.J.A.C. 13:45B. Additionally, each out-of-State holder of a New Jersey employment agency license or out-of-State registrant must file the name and address of a New Jersey agent for service of process.

Subchapter 9 is reserved.

Subchapters 10 and 11 concern the registration for consulting or outplacement organizations and prepaid computer job matching or job listing services, respectively. The subchapters set forth application information and bonding requirements.

Subchapter 12 sets forth rules concerning the advertising and solicitation of employment services and personnel services or products.

Subchapter 13 states that violations of the rules are to be deemed violations of the Personnel Services Act, N.J.S.A. 34:8-43 et seq., and if applicable, the Consumer Fraud Act, N.J.S.A. 56:8-1 et seq. The subchapter also sets forth the power of the Director to enforce the provisions of the Personnel Services Act, and if applicable, the Consumer Fraud Act, and the rules in the chapter and the standards for the issuance and renewal of licenses and registration.

Subchapter 14 defines and establishes the registration requirements for health care services firms to be licensed under the Consumer Fraud Act, N.J.S.A. 56:1 et seq., and the Personnel Services Act, N.J.S.A. 34:8-43 et seq., and identifies prohibited acts.

Subchapter 15 sets forth standards for health care service firms, licensed employment agencies operating as a nurse's registry and licensed employment agencies that place or employ health care professionals.

This proposal has not been calendared pursuant to the requirements of N.J.A.C. 1:30-3.1 and, therefore, a 60-day comment period is provided pursuant to N.J.A.C. 1:30-3.3(a)5.

Social Impact

The Division believes that all persons using the services of various firms regulated by this subchapter will benefit from the readoption of N.J.A.C. 13:45B. Additionally, the public will benefit from the rules ensuring the competence of health care service personnel which provide safeguards for both job seekers and potential employers. The regulation of out-of-State firms performing in-State activities provides a safeguard for New Jersey consumers by establishing standards of conduct and providing for an agent for service of process.

Economic Impact

The readoption of N.J.A.C. 13:45B will have an economic impact on businesses which are required to register annually with the Office of Consumer Protection and pay an annual registration fee. Due to the low cost of registration fees in proportion to the overall economic benefit that operating as a personnel service provides, these fees will not result in a detrimental economic effect on personnel services in New Jersey. Additionally, the public benefit derived from ensuring professional competence on the personnel services industry outweighs the cost of registration. The bond requirements in the rules proposed for readoption will also have an economic effect on some of the businesses regulated by N.J.A.C. 13:45B. Each employment agency, career consultant or any placement organization, prepaid computer job matching or job listing service and health care service firm is required to post a bond in the sum of $10,000 with a duly authorized surety company, while consulting firms providing temporary help services are required to post a bond in the amount of $1,000.

Federal Standards Statement

A Federal standards analysis is not required because there are no Federal standards or requirements applicable to the rules proposed for readoption.

Jobs Impact

The Division believes that the readoption of N.J.A.C. 13:45B is likely to have a positive impact on job creation in New Jersey. Although it is impossible to accurately calculate the number of jobs which will be created as a result of the readoption of the rules, it is the business of personnel services firms to employ persons seeking work. While the rules will not create any jobs, they establish uniform standards and protections for persons using their services.

Agriculture IndustryImpact

The rules proposed for readoption will have no impact on the agriculture industry in the State.

Regulatory Flexibility Analysis

The Regulatory Flexibility Act, N.J.S.A. 52:14B-16 et seq. (the Act), requires the Division to give a description of the types and an estimate of the number of small businesses to which the rules proposed for readoption will apply. If, for the purposes of the Act, the approximately 2,079 employment agencies, consulting firms, entertainment agencies, career consulting or outplacement agencies and health care service firms in New Jersey, are considered "small businesses" within the meaning of the Act, then the following analysis applies.

The Act requires the Division to set forth the reporting, recordkeeping, and other compliance requirements of the proposal including the kinds of professional services likely to be needed to comply with the requirements. The Act further requires the Division to estimate the initial and annual compliance costs, outline the manner in which it has designed the rules to minimize any adverse economic impact upon small businesses, and to set forth whether the rules establish differing compliance requirements for small businesses.

The rules contain no reporting requirements. However, the rules do include recordkeeping requirements. N.J.A.C. 13:45B-2.4 details the requirements for employment agency records. N.J.A.C. 13:45B-6 requires entertainment agencies to file a copy of their contract form, and N.J.A.C. 13:45B-12 requires copies of advertisements to be kept by the agency for a minimum of two years.

The rules proposed for readoption also impose numerous compliance requirements.

Subchapter 2 requires employment agencies to obtain a license, deposit a bond with the Director, maintain records, enter into written agreements with job seekers, provide job seekers with relevant documents and file the fee schedule.

Subchapter 3 sets forth requirements for the location of employment agencies.

Subchapter 4 details requirements for the "aeronautical" classification, licensure for a licensee that designates their field as "career counseling," and requirements for a temporary placement operation.

Subchapter 5 sets forth a bond requirement for consulting firms.

Subchapter 6 details requirements for entertainment agency licensure, contracts and advertising.

Subchapter 7 sets forth the fee schedule and license and registration expiration information.

Subchapter 8 details the application of the rules for out-of-State businesses and states who must be a registered agent.

Subchapter 10 sets forth the registration and bond requirements for career consultants.

Subchapter 11 sets forth the registration and bond requirements for prepaid computer job matching or job listing services.

Subchapter 12 details advertising requirements offering employment or personnel services or products and career consulting and outplacement organizations.

Subchapter 14 sets forth the registration and bond requirements for health care service firms.

Subchapter 15 sets forth the requirements for registration and duties of healthcare service firms.

Costs of compliance with the rules are discussed in the Economic Impact above. The Board believes that no professional services are likely to be needed to comply with the rules proposed for readoption. The Division considers the proposed readoption necessary to preserve the health, safety and welfare of the public. Compliance requirements do not differ based on size of the business in order to ensure that all services covered in these rules are provided uniformly throughout the State.

Smart Growth Impact

The Director does not anticipate that the rules proposed for readoption will have any impact on the achievement of smart growth and the implementation of the State Development and Redevelopment Plan, otherwise known as the State Plan.

Full text of the proposed readoption may be found in the New Jersey Administrative Code at N.J.A.C. 13:45B

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Posted October 7, 2002