Proposed legislation introduced in California, AB 2741, would add significant requirements to the staffing industry and impact contingent workforce programs, from restricting conversion fees to disclosing both bill rates and pay rates to workers.

Among the implications for buyers of staffing services is that they would be required to hire temporary workers directly after a period of time and they would have to give temps first shot at permanent jobs, Jose DeLuna, managing director at Omni Resources Solutions LLC in Orange County and a consultant to staffing firms, said in a phone call with SIA.

The California bill would cover all types of temporary workers, unlike recent legislation in Illinois and New Jersey that focused only on industrial staffing. The California bill was introduced on Feb. 15 by Rep. Matt Haney, D-San Francisco. Haney offered to make several changes to the legislation; however, Malara said no official language has come out. The American Staffing Association is treating the bill as is.

“It’s definitely one of the most overreaching bills we’ve ever seen,” said Toby Malara, VP of government relations at the ASA.

The bill is also vague, Malara said, and it’s unclear how some of its provisions would be put in place. The ASA has adopted an “all-hands” approach to defeating it, which could come before the committee next month.

Even if the offer from Haney’s office holds, there are still many issues with the legislation, Malara said in a note to SIA.

Paul Sorensen, CEO at staffing provider Partners Personnel, said CalChamber presented an update on the bill on March 15, where it reported the legislation was being amended to remove some provisions. The proposed changes include removing requirements that staffing firms report their bill rates to workers and that client firms with more than 100 temporary workers publicly report the number of temporary workers they have hired.

Right to apply. The amendments would change section 1522(a) of the bill, which states a temporary worker at a client long term would get the opportunity to become a directly hired employee of the client firm. The change would give workers the right to apply but not require client companies to hire them.

“We are glad to see this bill is being cut back significantly,” Sorensen said in a note to SIA. “But remaining language in the bill — e.g., 1522(a) — remains unworkable.”

The requirement that temporary workers performing services for client companies on a long-term, continuing basis is one concerning provision.

Conversion fees. Another anticipated change pertains to conversion fees. While the original bill would preclude such fees entirely. the ASA anticipates the language would be updated so that staffing firms could still charge conversion fees within two or three months into an assignment, Sorensen said.

Among the original provisions in AB 2741 before the recently proposed amendments:

  • Wage statements sent to temporary workers would be required to include not only their wage information but also the bill rate that client companies pay.
  • Conversion fees would be banned.
  • Every temporary worker at a client long-term would get the opportunity to become a directly hired employee of the client firm. “Long-term” is not defined.
  • Temporary workers would get first offer for permanent positions.
  • Staffing firms would need to notify temporary workers when sending them to locations where there is a strike, lockout or other labor difficulties. The workers would be able to refuse the assignment without prejudice.
  • Client companies with 100 or more employees hired through staffing firms would have to annually post the number of temporary workers they have hired.