225 ILCS 510/ Nurse Agency Licensing Act.

(225 ILCS 510/1) (from Ch. 111, par. 951)

Sec. 1. Short title. This Act may be cited as the Nurse Agency Licensing Act.

(Source: P.A. 86-817; 86-1475.)

(225 ILCS 510/2) (from Ch. 111, par. 952)

Sec. 2. The General Assembly intends to protect the public's right to high quality health care by assuring that nurse agencies employ, assign and refer licensed and certified personnel to health care facilities.

(Source: P.A. 86-817.)

(225 ILCS 510/3) (from Ch. 111, par. 953)

Sec. 3. Definitions. As used in this Act:

"Certified nurse aide" means an individual certified as defined in Section 3-206 of the Nursing Home Care Act, Section 3-206 of the ID/DD Community Care Act, or Section 3-206 of the MC/DD Act, as now or hereafter amended.

"Covenant not to compete" means an agreement between a nurse agency and an employee that restricts the employee from performing:

(1) any work for another employer for a specified period of time;

(2) any work in a specified geographic area; or

(3) any work for another employer that is similar to the work the employee performs for the employer that is a party to the agreement.

"Department" means the Department of Labor.

"Director" means the Director of Labor.

"Employee" means a nurse or a certified nurse aide.

"Health care facility" is defined as in Section 3 of the Illinois Health Facilities Planning Act, as now or hereafter amended. "Health care facility" also includes any facility licensed, certified, or approved by any State agency and subject to regulation under the Assisted Living and Shared Housing Act or the Illinois Public Aid Code.

"Licensee" means any nurse agency which is properly licensed under this Act.

"Long-term basis" means the placement of a nurse or a certified nurse aide at a health care facility for an initial employment, assignment, or referral term of more than 24 continuous months by a nurse agency that incurs the following expenses to place the nurse or certified nurse aide at the health care facility: (i) educational material expenses, if required; (ii) expenses for credentialing, licensure, or certification; or (iii) expenses for airline travel, lodging, meals, and ground transportation provided to a nurse or certified nurse aide. "Long-term basis" does not include the placement of a nurse or a certified nurse aide at a health care facility for an initial employment, assignment, or referral term of an undefined duration.

"Nurse" means a registered nurse, a licensed practical nurse, an advanced practice registered nurse, or any individual licensed under the Nurse Practice Act.

"Nurse agency" means any individual, firm, corporation, partnership, or other legal entity that employs, assigns, or refers nurses or certified nurse aides to a health care facility for a fee. The term "nurse agency" includes nurses registries. The term "nurse agency" does not include services provided by home health agencies licensed and operated under the Home Health, Home Services, and Home Nursing Agency Licensing Act or a licensed or certified individual who provides his or her own services as a regular employee of a health care facility, nor does it apply to a health care facility's organizing nonsalaried employees to provide services only in that facility.

"Temporary basis" means an initial employment, assignment, or referral term of an undefined duration or a duration of 24 continuous months or less exclusive of any extension.

(Source: P.A. 102-946, eff. 7-1-22; 102-1124, eff. 2-3-23.)

(225 ILCS 510/4) (from Ch. 111, par. 954)

Sec. 4. Licensing. The Department shall license nurse agencies in accordance with this Act for the protection of the health, welfare and safety of patients and residents. No person may establish, operate, maintain, or advertise as a nurse agency in the State of Illinois unless the person is licensed under this Act by the Department of Labor. Being licensed under the Home Health, Home Services, and Home Nursing Agency Licensing Act does not relieve home health agencies that provide nurse agency services from the requirement of obtaining licensure under this Act. No health care facility shall use the services of an unlicensed nurse agency.

(Source: P.A. 94-379, eff. 1-1-06.)

(225 ILCS 510/5) (from Ch. 111, par. 955)

Sec. 5. Application for license. An application to operate a nurse agency shall be made to the Department on forms provided by the Department. A separate application shall be submitted for each additional location from which a nurse agency is operated. All applications must be under oath and must be accompanied by an equitable application fee which will be set by the Department by rule. A separate license must be obtained for each location from which a nurse agency is operated unless the nurse agency is owned and managed by the same person or persons. Submission of false or misleading information is a petty offense punishable by a fine of $500. The application shall contain the following information:

(1) name and address of the person, partnership, corporation or other entity that is the applicant;

(2) if the applicant is a corporation or limited liability company, a copy of its articles of incorporation or organization, a copy of its current bylaws, and the names and addresses of its officers and directors and shareholders owning more than 5% of the corporation's stock or membership units;

(3) the name and location of premises from which the applicant will provide services;

(4) the names and addresses of the person or persons under whose management or supervision the nurse agency will be operated;

(5) a statement of financial solvency;

(6) a statement detailing the experience and qualifications of the applicant to operate a nurse agency, however, the failure of a nurse agency to demonstrate previous experience to operate an agency does not in and of itself constitute grounds for the denial of a license;

(7) evidence of compliance or intent to comply with State or federal law relating to employee compensation, including but not limited to, social security taxes, State and federal income taxes, workers' compensation, unemployment taxes, and State and federal overtime compensation laws;

(8) evidence of general and professional liability insurance in the amounts of at least $1,000,000 per incident and $3,000,000 in aggregate and workers' compensation coverage for all nurses or certified nursing aides employed, assigned, or referred by the nurse agency to a health care facility;

(8.5) copies of all currently effective contracts with health care facilities; and

(9) any other relevant information which the Department determines is necessary to properly evaluate the applicant and application as required by the Department by rule.

(Source: P.A. 102-946, eff. 7-1-22.)

(225 ILCS 510/6) (from Ch. 111, par. 956)

Sec. 6. Issuance of license. Upon receipt and after review of an application for a license under this Act, the Director shall issue a license if it is determined that the applicant is qualified to operate a nurse agency, based upon demonstrated compliance with Section 5 of this Act. A license issued by the Department in accordance with this Section shall remain effective for a period of one year unless the license is revoked or suspended pursuant to Section 9 of this Act. When a nurse agency is sold or ownership is transferred, the transferee shall notify the Department and apply for a new license at least 45 days prior to the transfer. The transferor shall remain responsible for the operation of the agency until such time as a license is issued to the transferee.

(Source: P.A. 86-817.)

(225 ILCS 510/7) (from Ch. 111, par. 957)

Sec. 7. Renewal of license. At least 90 days prior to license expiration, the licensee shall submit an attestation detailing the number of contracted shifts, number of shifts missed, number of shifts fulfilled for the 3 quarters preceding the application date, and an application which meets the requirements of Section 5 of this Act for renewal of the license. If the application is approved pursuant to Section 6, the license shall be renewed for an additional one-year period.

(Source: P.A. 102-946, eff. 7-1-22.)

(225 ILCS 510/8) (from Ch. 111, par. 958)

Sec. 8. Grounds for denial of a license. An application for a license may be denied for any of the following reasons:

(a) failure to comply with the minimum standards set forth by this Act or its rules;

(b) conviction of the applicant of a felony;

(c) insufficient financial or other resources to operate the nurse agency in accordance with the requirements of this Act and the minimum standards, rules and regulations promulgated thereunder; or

(d) failure to establish appropriate personnel policies and procedures for selecting nurses and certified nurse aides for employment, assignment or referral.

(Source: P.A. 86-817.)

(225 ILCS 510/9) (from Ch. 111, par. 959)

Sec. 9. Suspension, revocation, or refusal to issue or renew a license. The Department may, after appropriate notice and hearing, suspend, revoke, or refuse to issue or renew any license if the licensee or applicant fails to comply with this Act or the rules and regulations promulgated by the Department under this Act.

(Source: P.A. 88-230.)

(225 ILCS 510/10) (from Ch. 111, par. 960)

Sec. 10. Illinois Administrative Procedure Act. The Illinois Administrative Procedure Act, including the contested case provisions and the requirements of Section 10-65 of that Act, shall apply to this Act.

(Source: P.A. 88-45.)

(225 ILCS 510/11) (from Ch. 111, par. 961)

Sec. 11. Review under the Administrative Review Law. All final administrative decisions of the Department under this Act are subject to judicial review under the Administrative Review Law, as now or hereafter amended, and its rules. Administrative decision is defined as in Section 3-101 of the Code of Civil Procedure, as now or hereafter amended.

(Source: P.A. 86-817.)

(225 ILCS 510/12) (from Ch. 111, par. 962)

(Text of Section before amendment by P.A. 103-848)

Sec. 12. Liability of nurse agencies. Health care facilities are responsible for supervising nurse agency employees assigned or referred to the facilities; however, where a health care facility is found liable for an injury to a patient or resident because of a negligent act performed by a nurse or certified nurse aide employed, assigned or referred by the nurse agency, the health care facility has a right to be compensated by the nurse agency for any and all expenses incurred related to any liability for the nurse agency's negligent hiring. Negligent hiring by a nurse agency shall be the failure of an agency to follow the procedures outlined in Section 13 of this Act. This provision shall not otherwise limit in any way the actions a health care facility may have against a nurse agency at law or in equity.

(Source: P.A. 86-817; 86-1043.)

(Text of Section after amendment by P.A. 103-848)

Sec. 12. Liability of nurse agencies. Health care facilities are responsible for supervising nurse agency employees assigned or referred to the facilities; however, where a health care facility is found liable for an injury to a patient or resident because of a negligent act performed by a nurse or certified nurse aide employed, assigned, or referred by the nurse agency, the health care facility has a right to be compensated by the nurse agency for any and all expenses, fines, or damages incurred related to any liability for the nurse agency's negligence, including negligent hiring. Negligent hiring by a nurse agency shall be the failure of an agency to follow the procedures outlined in Section 13 of this Act. This provision shall not otherwise limit in any way the actions a health care facility may have against a nurse agency at law or in equity. This Section is not subject to enforcement by the Department.

(Source: P.A. 103-848, eff. 1-1-25.)

(225 ILCS 510/13) (from Ch. 111, par. 963)

Sec. 13. Application for employment.

(a) Every nurse agency shall cause each applicant for employment, assignment, or referral, as a nurse to complete an application form including the following information:

(1) name and address of the applicant;

(2) whether or not such applicant is a nurse currently licensed by the Department of Financial and Professional Regulation;

(3) if so licensed, the number and date of such license; and

(4) references and dates and places of previous employment.

Prior to employing, assigning, or referring a nurse, the agency shall contact the Department of Financial and Professional Regulation to determine whether the nurse's license is valid and in good standing. Written verification shall be sent by the Department of Financial and Professional Regulation within 20 working days. At least biennially thereafter, the nurse agency shall contact the Department of Financial and Professional Regulation to verify this information in writing. The nurse agency shall review the disciplinary report published by the Department of Financial and Professional Regulation on a monthly basis to determine whether the nurse's license is valid and in good standing.

(b) Every nurse agency shall cause each applicant for employment, assignment, or referral, as a certified nurse aide to complete an application form including the following information:

(1) name and address of the applicant;

(2) whether or not the nurse aide is registered as having completed a certified course as approved by the Department of Public Health; and

(3) references and dates and places of previous employment.

Prior to employing, assigning, or referring a certified nurse aide, the agency shall review the information provided on the Health Care Worker Registry to verify that the certification is valid. Prior to employing, assigning, or referring a certified nurse aide to a position at a health care employer or long-term facility as defined in the Health Care Worker Background Check Act, the nurse agency shall review the information provided on the Health Care Worker Registry to verify that the certified nurse aide is not ineligible for the position pursuant to Section 25 of the Health Care Worker Background Check Act.

(c) Every nurse agency shall check at least 2 recent references and the dates of employment provided by the applicant, unless the applicant has not had 2 previous employers.

(d) Knowingly employing, assigning, or referring to a health care facility a nurse or certified nurse aide with an illegally or fraudulently obtained or issued diploma, registration, license, certificate, or background study constitutes negligent hiring by a nurse agency and is a violation of this Act.

(e) Nurses or certified nurses aides employed, assigned, or referred to a health care facility by a nurse agency shall be deemed to be employees of the nurse agency while working for the nurse agency or on nurse agency employment, assignment, or referral and may only be terminated by the nurse agency for cause.

(Source: P.A. 102-946, eff. 7-1-22; 102-1124, eff. 2-3-23.)

(225 ILCS 510/14) (from Ch. 111, par. 964)

Sec. 14. Minimum Standards.

(a) The Department, by rule, shall establish minimum standards for the operation of nurse agencies. Those standards shall include, but are not limited to:

(1) the maintenance of written policies and procedures;

(2) the maintenance and submission to the Department of copies of all contracts between the nurse agency and health care facility to which it assigns or refers nurses or certified nurse aides and copies of all invoices to health care facilities personnel. Executed contracts must be sent to the Department within 5 business days of their effective date; and

(3) the development of personnel policies for nurses or certified nurse aides employed, assigned, or referred to health care facilities, including a personal interview, a reference check, an annual evaluation of each employee (which may be based in part upon information provided by health care facilities utilizing nurse agency personnel), and periodic health examinations. Executed contracts must be sent to the Department within 5 business days of their effective date and are not subject to disclosure under the Freedom of Information Act.

No less than 100% of the nurse or certified nurse aide hourly rate shall be paid to the nurse or certified nurse aide employee.

(b) Each nurse agency shall have a nurse serving as a manager or supervisor of all nurses and certified nurses aides.

(c) Each nurse agency shall ensure that its employees meet the minimum licensing, training, continuing education, and orientation standards for which those employees are licensed or certified.

(d) A nurse agency shall not employ, assign, or refer for use in an Illinois health care facility a nurse or certified nurse aide unless certified or licensed under applicable provisions of State and federal law or regulations. Each certified nurse aide shall comply with all pertinent regulations of the Illinois Department of Public Health relating to the health and other qualifications of personnel employed in health care facilities.

(e) The Department may adopt rules to monitor the usage of nurse agency services to determine their impact.

(f) Nurse agencies are prohibited from recruiting potential employees on the premises of a health care facility or requiring, as a condition of employment, assignment, or referral, that their employees recruit new employees for the nurse agency from among the permanent employees of the health care facility to which the nurse agency employees have been employed, assigned, or referred, and the health care facility to which such employees are employed, assigned, or referred is prohibited from requiring, as a condition of employment, that their employees recruit new employees from these nurse agency employees. Violation of this provision is a business offense.

(g) Nurse agencies are prohibited from entering into covenants not to compete with nurses and certified nurse aides if the nurse is employed, assigned, or referred by a nurse agency to a health care facility on a temporary basis or the certified nurse aide is employed, assigned, or referred by a nurse agency to a health care facility on a temporary basis. A covenant not to compete entered into on or after July 1, 2022 (the effective date of Public Act 102-946) between a nurse agency and a nurse or a certified nurse aide is illegal and void if (i) the nurse is employed, assigned, or referred by a nurse agency to a health care facility on a temporary basis or (ii) the certified nurse aide is employed, assigned, or referred by a nurse agency to a health care facility on a temporary basis. In any contract on a temporary basis with any nurse, certified nurse aide, or health care facility, a nurse agency is prohibited from requiring the payment of liquidated damages, conversion fees, employment fees, buy-out fees, placement fees, or other compensation if the nurse or certified nurse aide is hired as a permanent employee of a health care facility.

(g-5) Beginning on the effective date of this amendatory Act of the 102nd General Assembly and ending on December 31, 2027, a nurse agency may enter into a covenant not to compete with a nurse or a certified nurse aide if (i) the nurse is employed, assigned, or referred by a nurse agency to a health care facility on a long-term basis or (ii) the certified nurse aide is employed, assigned, or referred by a nurse agency to a health care facility on a long-term basis. However, if a covenant not to compete that was entered into on or before December 31, 2027 expires on or after January 1, 2028, the covenant not to compete shall remain in effect until its expiration date. To be enforceable, the term of a covenant not to compete entered into under this subsection must be concurrent with the term of the initial employment, assignment, or referral of the nurse or certified nurse aide to a health care facility. A contract on a long-term basis between any nurse, certified nurse aide, or health care facility and a nurse agency may provide for the payment of actual damages, conversion fees, employment fees, buy-out fees, placement fees, or other reasonable expenses resulting from a violation of the contract that occurred during the initial employment, assignment, or referral term.

(h) A nurse agency shall submit a report quarterly to the Department for each health care entity with whom the agency contracts that includes all of the following by provider type and county in which the work was performed:

(1) A list of the average amount charged to the health care facility for each individual employee category.

(2) A list of the average amount paid by the agency to employees in each individual employee category.

(3) A list of the average amount of labor-related costs paid by the agency for each employee category, including payroll taxes, workers' compensation insurance, professional liability coverage, credentialing and testing, and other employee related costs.

The Department shall publish by county in which the work was performed the average amount charged to the health care facilities by nurse agencies for each individual worker category and the average amount paid by the agency to each individual worker category.

(i) The Department shall publish on its website the reports yearly by county.

(j) The Department of Labor shall compel production of the maintained records, as required under this Section, by the nurse agencies.

(Source: P.A. 102-946, eff. 7-1-22; 102-1124, eff. 2-3-23.)

(225 ILCS 510/14.1)

Sec. 14.1. Investigations; orders; civil penalties.

(a) The Department may at any time, and shall upon receiving a complaint from any interested person, investigate any person licensed or applying for a license under this Act suspected of violating any provision of any Section except Section 14.3. The Department shall investigate any person who operates or advertises a nurse agency without being licensed under this Act. The Department shall establish a system of reporting complaints against a health care staffing agency. The Department shall publish on its website how an interested party may submit a complaint of a violation of this Act to the Department. Complaints may be made by an interested party. Complaints against a nurse agency shall be investigated by the Department of Labor. The investigations shall take into consideration the responsibility of health care facilities under Section 12 for supervising nurse agency employees assigned or referred to the facilities. For purposes of this Section, "interested party" means a health care facility, nurse staffing agency, or an employee of a health care facility or nurse staffing agency.

The Director or his or her authorized representative may examine the premises of any nurse agency, may compel by subpoena, for examination or inspection, the attendance and testimony of witnesses and the production of books, payrolls, records, papers and other evidence in any investigation or hearing, and may administer oaths or affirmations to witnesses.

(b) After appropriate notice and hearing, and if supported by the evidence, the Department may issue and cause to be served on any person an order to cease and desist from violation of this Act and to take any further action that is reasonable to eliminate the effect of the violation of any Section except Section 14.3.

Whenever it appears that any person has violated a valid order of the Department issued under this Act, the Director may commence an action and obtain from the court an order directing the person to obey the order of the Department or be subject to punishment for contempt of court.

The Department may petition the court for an order enjoining any violation of any Section of this Act except Section 14.3.

(c) Any licensee or applicant who violates any provision of this Act or the rules adopted under this Act shall be subject to a civil penalty of $10,000 per occurrence payable to the Department for the purpose of enforcing this Act. Civil penalties may be assessed by the Department in an administrative action and may, if necessary, be recovered in a civil action brought by the Director through the Attorney General of the State of Illinois or the State's attorney of any county in which the violation occurred. The court may order that the civil penalties assessed for violation of this Act, together with any costs or attorney's fees arising out of the action to collect the penalties, be paid to the Department. The fact that the violation has ceased does not excuse any person from liability for civil penalties arising from the violation.

(d) Any nurse staffing agency that has been found not to have paid an employee 100% of the hourly wage rate identified in the contract between such nurse staffing agency and health care facility shall be liable to the employee for the actual amount of the underpayment, plus damages of 5% of the amount of the underpayment.

(Source: P.A. 102-946, eff. 7-1-22.)

(225 ILCS 510/14.2)

Sec. 14.2. Criminal penalties; report of violation.

(a) Any person who wilfully violates any provision of this Act, or any rule adopted or order issued under this Act, or who obstructs the Department, its inspectors or agents, from investigating any alleged violation of this Act or of any rule adopted or order issued under this Act, commits a Class A misdemeanor. Each day a violation of this Act continues shall constitute a separate and distinct offense.

(b) Whenever, in the opinion of the Department, a violation of this Act or of the rules adopted under this Act has occurred, the Department shall report the violation to the Attorney General of the State of Illinois or the State's Attorney of the county in which the violation occurred.

(Source: P.A. 88-230.)

(225 ILCS 510/14.3)

(Text of Section before amendment by P.A. 103-848)

Sec. 14.3. Contracts between nurse agencies and health care facilities.

(a) A contract entered into on or after the effective date of this amendatory Act of the 102nd General Assembly between the nurse agency and health care facility must contain the following provisions:

(1) A full disclosure of charges and compensation. The disclosure shall include a schedule of all hourly bill rates per category of employee, a full description of administrative charges, and a schedule of rates of all compensation per category of employee, including, but not limited to, hourly regular pay rate, shift differential, weekend differential, hazard pay, charge nurse add-on, overtime, holiday pay, and travel or mileage pay.

(2) A commitment that nurses or certified nurse aides employed, assigned, or referred to a health care facility by the nurse agency perform any and all duties called for within the full scope of practice for which the nurse or certified nurse aide is licensed or certified.

(3) No less than 100% of the nurse or certified nurse aide hourly rate shall be paid to the nurse or certified nurse aide employee.

(b) A party's failure to comply with the requirements of subsection (a) shall be a defense to the enforcement of a contract between a nurse agency and a health care facility. Any health care facility or nurse agency aggrieved by a violation of subsection (a) shall have a right of action in a State court against the offending party. A prevailing party may recover for each violation:

(1) liquidated damages of $1,500 or actual damages, whichever is greater;

(2) reasonable attorney's fees and costs, including expert witness fees and other litigation expenses; and

(3) other relief, including an injunction, as the court may deem appropriate.

(c) This Section does not apply to contracts on a long-term basis between a nurse agency and a health care facility providing for the employment, assignment, or referral of nurses or certified nurse aides to the health care facility.

(Source: P.A. 102-946, eff. 7-1-22; 102-1124, eff. 2-3-23.)

(Text of Section after amendment by P.A. 103-848)

Sec. 14.3. Contracts between nurse agencies and health care facilities.

(a) A contract entered into on or after the effective date of this amendatory Act of the 103rd General Assembly between the nurse agency and health care facility must contain the following provisions:

(1) A full disclosure of charges and compensation. The disclosure shall include a schedule of all hourly bill rates per category of employee, a full description of administrative charges, and a schedule of rates of all compensation per category of employee, including, but not limited to, hourly regular pay rate, shift differential, weekend differential, hazard pay, charge nurse add-on, overtime, holiday pay, and travel or mileage pay.

(2) A commitment that nurses or certified nurse aides employed, assigned, or referred to a health care facility by the nurse agency perform any and all duties called for within the full scope of practice for which the nurse or certified nurse aide is licensed or certified.

(3) A provision requiring that no less than 100% of the nurse or certified nurse aide hourly rate shall be paid to the nurse or certified nurse aide employee.

(4) A provision specifying that the health care facility has a right to be compensated by the nurse agency for any and all expenses, fines, or damages incurred related to any liability for a negligent act performed by a nurse or certified nurse aide employed, assigned, or referred by the nurse agency.

(b) A party's failure to comply with the requirements of subsection (a) shall be a defense to the enforcement of a contract between a nurse agency and a health care facility. Any health care facility or nurse agency aggrieved by a violation of subsection (a) shall have a right of action in a State court against the offending party. A prevailing party may recover for each violation:

(1) liquidated damages of $1,500 or actual damages, whichever is greater;

(2) reasonable attorney's fees and costs, including expert witness fees and other litigation expenses; and

(3) other relief, including an injunction, as the court may deem appropriate.

(c) This Section does not apply to contracts on a long-term basis between a nurse agency and a health care facility providing for the employment, assignment, or referral of nurses or certified nurse aides to the health care facility.

(Source: P.A. 102-946, eff. 7-1-22; 102-1124, eff. 2-3-23; 103-848, eff. 1-1-25.)

(225 ILCS 510/15) (from Ch. 111, par. 965)

Sec. 15. Rulemaking. The Department shall adopt rules pursuant to the Illinois Administrative Procedure Act to implement this Act.

(Source: P.A. 86-817.)