California’s Staffing Buyer Bill | DCR Workforce Blog

California’s Staffing Buyer Bill

staffing lawYes, once again we are blogging about California’s employment regulations. That’s because California often leads the nation in groundbreaking legislation to protect the rights of workers. Last Month, Governor Jerry Brown passed the Staffing Buyer bill AB 1897 into law. Every company using non-traditional employees needs to be aware of its legal implications to their program.

Currently, a few states have laws to regulate agencies providing temporary and day labor in some way. Massachusetts, Illinois, New Jersey and Texas get temporary workers to register with the state. Massachusetts, Florida, Georgia and New Hampshire limit or prohibit fees which are charged to temporary workers for transportation to and from a worksite. But the new law in California approached the matter more comprehensively.

Described as a historic new law, this bill holds corporations jointly accountable when they hire workers through staffing agencies. Companies can be found liable if the agencies working on their behalf cheat workers out of wages, deprive them of workers’ compensation, refuse to pay unemployment taxes on their account, or force them to work in unsafe environments. The law aims to close the loophole which allowed major corporations to dissociate themselves from their own staffing agencies and subcontractors.

This law exposes employers who hire staffing agencies without evaluating their practices, and requires them to contractually specify their expectations of adherence to the Labor Code. They must also put remedies in place for any possible violations. The bill allows for a 30 day notice period during which a company could set matters right after being notified of any wrongdoing by their labor contractors and staffing agencies. Failure to take effective corrective measures could land the company and its suppliers in litigation.

If You are a Buyer of Staffing Services:

  • Your brand image will be affected by employing staffing agencies with questionable practices towards the workers.
  • Exercise due care and diligence in choosing your staffing buyers and contractors.
  • Make sure compliance provisions are incorporated in the contract and fully implemented. Agreements should include specific remedies against the staffing agency for liability created by its acts.
  • Take responsibility for your non-employees. Your workforce policies and procedures should protect their rights and provide them with safe working conditions.
  • Review your policies, train your managers and stay responsible and connected to ensure that the staff agency and its employees are adhering to your required standards.
  • The state of California will not tolerate finger pointing. Do not blame the staffing agency or contractor when in trouble. This will not be deemed as an acceptable defense.
  • Those conducting business in other states should recognize that – although this legislation only applies to California – other states and the Federal government may quickly follow suit. Adopt appropriate practices now.

If You are a Staffing Agency

  • Avoid illegal practices like wage theft, non-payment unemployment taxes and workers’ compensation, or tolerance of unsafe working conditions. These actions are illegal in all states, and the penalties are severe.
  • Keep in mind that the California division of Occupational Safety and Health Act has recently made staffing firms also liable for accidents suffered by workers at their clients’ work site.

If You are a Temporary Worker:

  • You need not be afraid of standing up for your rights with regard to wages or safe working conditions. You do not need not check out and return to work, just to enable your employer to avoid paying you overtime. If asked to work in an unsafe work environment, be sure to complain to the authorities. Protection against retaliation is provided at the Federal and State level.

Non-traditional and temporary employment has been growing steadily over the past three decades. Many companies depend upon staffing agencies as a “no risk” way to quickly source qualified workers. This growth has increased public awareness of the working conditions of temporary workers, which continues to result in increased legislation to protect worker rights. California and other proactive states are not alone. The National Labor Relations Board also has plans for a new “Joint Employer Standard” which looks at staffing buyers as joint employers of temporary workers sourced through agencies. Staffing agencies and the companies that use their services must stay aware of emerging legislation, working to avoid possible liability.

The content on this blog is for informational purposes only and cannot be construed as specific legal advice or as a substitute for competent legal advice. They reflect the opinions of DCR Workforce and may not reflect the opinions of any individual attorney. Do contact an attorney for advice specific to your issue or problem.
Lalita is a people/project manager with extensive experience in operations, HCM and training and development across industries like banking, education, business consulting, BPO and information technology. She believes in a dynamic approach to life and learning as change is the only constant.