AB 1897 -- The California Employer's Next Nightmare

Hey, it's Halloween.  Have you heard about Assembly Bill 1897?  It will make you scream. 

AB 1897 enacts a new section to the Labor Code, section 2810.3.  This section applies to businesses of 25 or more employees that obtain at least 5 workers at any given time from temp agencies, personnel companies or labor contractors.  (Of course, government employers are exempted from these important laws!)  Under section 2810.3, a host business is liable for payment of wages to the agency’s, the agency’s failure to purchase workers’ compensation coverage; and compliance with health and safety laws.  

Liability for the host company is imposed whether or not the host company knew that the agency was not paying wages correctly, or following the law.  Moreover, liability is not dependent upon the host employer being a joint employer of the workers. 

It is disappointing that this law was enacted.  While it may be a fair and proper law to pass, if the host employer participated in the wrongdoing, imposing liability simply for using the services of an agency is unwarranted and just plain wrong.  This law will significantly impact the temporary services industry and encourage additional lawsuits against businesses that were not in a position to control the wages or other activities of the agency employing the workers.