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California Proposes Contingent Workforce Law

Joseph Nordlinger's picture

One of the biggest points of contention about the use of contingent and temporary workers is that businesses are often accused of using contractual arrangements to avoid the legal responsibilities associated with hiring full-time employees. According to a recent article I read from Independent news source Voxxi, California is on the verge of becoming one of the first states to hold companies responsible for wage and hour violations committed by subcontractors and staffing agencies if a bill proposed at the end of May becomes law. It has already passed the Assembly on a 45-20 vote and is now in the hands of the Senate.

The bill focuses on complaints from labor leaders that businesses circumvent regulations by hiring through agencies and contracting with smaller firms, which leads to higher rates of wage violations and on-the-job injuries. The problem is that often only the subcontractor and temp agencies face fines, while the company where the temps actually work is unaffected by enforcement actions.

Caitlin Vega of the California Labor Federation says in support of the bill that the current laws are insufficient to protect workers' rights in the emerging subcontracted economy. This single change will hold violating companies accountable and help responsible contractors flourish. While there are several states that have laws regulating temp and day labor agencies, this could be the first one that addresses the companies that utilize them.

The law is expected to be heavily opposed by the business community. Jennifer Barrera, a policy advocate for the California Chamber of Commerce, says that this law would be an added burden to small businesses that are already struggling with hiring. Companies will now need to learn how to maintain compliance and execute contingent workforce best practices. 

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