CalChamber Capitol Report: Fact Sheet Explains New Liability for Certain Employers
The California Chamber of Commerce released a fact sheet on a sweeping new law that will impose liability on employers who contract for labor and services.
The recently signed bill, AB 1897 (Hernández; D-West Covina; Chapter 728, Statutes of 2014), “creates new liability for employers who contract out for labor and services for the wage-and-hour violations or workers’ compensation violations of their subcontractor,” Jennifer Barrera, CalChamber policy advocate, explains in the latest CalChamber Capitol Report video.
The purpose of the law is to hold companies accountable for wage-and-hour violations when using staffing agencies or other labor contractors to supply workers.
In brief, if a labor contractor fails to pay its workers properly or fails to provide workers’ compensation coverage for those employees, the “client employer” can now be held legally responsible and liable.
Barrera encourages all employers to review this fact sheet to determine whether their contracts fall within the scope of the bill.
The new law goes into effect January 1, 2015.
Employers who have specific questions regarding existing contracts or new contracts after reviewing the fact sheet should seek legal counsel.