The passage of the Affordable Care Act (“ACA”) back in March of 2010 created an environment where employers sought to reduce the number of permanent full time employees and seek out temporary labor. This is due to the ACA’s insurance requirement for employers with a certain number of employees who work longer than 30 hours. As a result, the staffing and temporary agency market rapidly grew but the laws protecting the rights of these laborers were nowhere to be found.
Finally, the passage of California’s AB 1897, which takes effect on January 1, 2015, holds California employers responsible when their “labor contractors,” such as staffing agencies, violate labor laws. The amended Labor Code Section 2810.3 fills the gap that has prevented many temporary laborers from taking action against the client employer when it violated their rights.
This shared liability means that if a labor contractor such as a staffing agency violates rights such as the state’s minimum wage, California Medical Rights Act (for private employers with greater than 50 employees), or retaliation for a protected activity, you now have a right to bring action against both the staffing agency and the client employer. Prior to this law, employees had the burden to prove that the employer they were assigned to was a “Joint Employer” with the staffing agency. Now, that burden has been removed.
Importantly, the law defines “labor contractors” as an individual or entity that provides workers to perform labor within the client employer’s “usual course of business.” The law goes on and defines “usual course of business” as the “regular and customary work of a business, performed within or upon the premises or worksite of the client employer.” For example, this means that if the client employer was a health care provider and the staffing agency workers were health care workers such as nurses, occupational therapists or speech language pathologists then this law would apply. On the other hand, the law does not apply to employers that use independent contractors for work that is outside their “usual course of business.” For instance, if the client employer is a health care provider and the staffing agency worker was a janitor or security guard, this law would not apply. Therefore, the staffing agency worker must perform the regular work that the client employer provides.
This is important because if you as the protected labor contractor experience a work-related violation such as retaliation by the staffing agency for complaining about a protected activity or whistleblowing on a client employer’s or the staffing agency’s violation of a law, you can now bring the action against both your labor contractor (or staffing agency) and the client employer.
A California laborer may file a complaint with the California Department of Industrial Relations here http://www.dir.ca.gov/ and/or with the National Labor Relations Board here http://www.nlrb.gov/. More information may also be obtained from California’s Labor and Workforce Development Agency: http://www.labor.ca.gov/.