Temporary Job Market in CA Threatened by New Bill

 SACRAMENTO, Calif, - Businesses in California will find it harder to obtain temporary workers if Gov. Gray Davis signs AB 1679 into law.

The bill, introduced by Assemblyman Kevin F. Shelley (D-San Francisco), requires that anyone who performs work for a contractor must essentially be hired as an employee by that contractor. Currently, thousands of contractors prefer to meet their temporary labor needs through staffing agencies that retain thousands of workers on their employee payrolls and pay all taxes. Last year, temporary staffing agencies filled over 60,000 jobs with a total payroll exceeding $50 million in California.

The union-sponsored bill, which creates a disincentive to use temporary staffing agencies, was pushed through the Legislature with very little notice. The current version of AB 1679 didn't have a public hearing until 11 p.m. on the chaotic last Monday of session.

“AB 1679 presents a roadblock to contractors who use a staffing agency to meet their temporary labor needs,” explained Kathryn Shepherd, president of California Staffing Professionals, a statewide association of staffing companies. “Staffing agencies ensure that workers are covered by workers' compensation, that state and federal taxes get paid, and that small contractors can find the labor they need to grow their businesses.”

Because AB 1679 will significantly increase costs to small contractors and mean fewer job opportunities, especially for low-income Californians, the California Chamber of Commerce has named AB 1679 one of the year's top five “Job Killers.”

Ed Wallace runs a landscaping business in Long Beach and uses temporary employees on a regular basis for projects such as building and maintaining parks. He said AB 1679 will make it extremely difficult for him to compete and will also limit his ability to hire workers from nonprofit Community Conservation Corps, which will face the same limitations under AB 1679 as for-profit staffing agencies.

“If this bill is signed, it will become much more expensive for me to offer work to the young people in Community Conservation Corps who are building their job skills and character on public works projects,” Wallace said. “Temporary staffing enables us to offer our services at an affordable price.”

AB 1679 will ultimately hurt homeowners and businesses because the inability of small contractors to obtain quality temporary labor will slow down construction projects, delay repair work and add costs, Shepherd said.

Opponents of AB 1679 sponsored a full-page newspaper ad in the September 27 edition of the Sacramento Bee calling for the bill's veto. Davis has until Oct. 14 to sign or veto the measure.