In Victory for Workers, CA Legislature Votes to Hold Employers Accountable for Labor Abuses by Third Party Staffing Agencies

Passage of AB 1897 a Key Step To Strengthening Workers’ Rights in CA’s Growing Staffing Industry

The California state legislature passed AB 1897 on Thursday, a bill that will strengthen protections for a quarter of a million workers in California’s fast-growing staffing industry. The measure regulates companies that outsource jobs to staffing agencies and other labor intermediaries and holds these employers at the top accountable for labor violations by their third-party contractors. AB 1897, which is backed by the California Labor Federation, the California Teamsters Public Affairs Council, the United Food and Commercial Workers Western States Council, SEIU and a broad coalition of labor and immigrant worker rights organizations, now goes to Governor Brown, who has until the end of September to sign it.

The National Employment Law Project (NELP) applauds the California legislature for taking this key step to ensure that companies that use labor brokers are liable for violations of core labor standards committed by third-party contractors. A statement from Christine Owens, executive director of NELP is below:

“Given the hyper-competitive nature of the staffing industry, and the intense pressure to lower labor costs in order to secure contracts, cutting wages and cutting corners is almost inevitable. It is little wonder that high-profile cases of wage theft and workers’ compensation fraud by staffing companies have arisen in California.

“By ensuring that companies cannot contract out their responsibility to pay lawful wages, carry workers’ compensation coverage and protect workers’ health and safety on the job, AB 1897 addresses two of the biggest concerns with staffing work.”

Major companies are increasingly separating themselves from the workers who produce and move their goods, or provide vital services core to their business, by inserting labor intermediaries like staffing agencies, franchisees, and other subcontractors, who they name as the “employers” of these workers, into their business plan. While companies continue to exert enormous control over the day-to-day work being done in their name, the fragmented business model can obfuscate who is ultimately responsible as the “employer” of their workers.

Contact:
Emma Stieglitz
emmas@berlinrosen.com
(646) 200-5307