Effective January 1, 2015, employers who hire temporary labor from labor contractors can be held liable for payment and workers’ compensation violations.  Specifically, the bill adds California Labor Code §2810.3, which provides in pertinent part:

 (b) A client employer shall share with a labor contractor all civil legal responsibility and civil liability for all workers supplied by that labor contractor for both of the following:

  1.  The payment of wages.
  2. Failure to secure valid workers’ compensation coverage as required by Section 3700.

The bill was enacted as a reaction to a recent shift from a traditional employer-employee relationship towards a business model that utilizes subcontracted or contingent workers. Proponents are concerned that this change creates challenges for workers and enforcement agencies in ensuring workers’ rights.

The law will affect the construction industry by increasing liability of employers who hire temporary labor to work on specific projects.  Although existing law requires employers to enter into written contracts for construction services that include workers compensation and wage information, the new law holds employers specifically accountable for violations related thereto.  Employers should be diligent in researching the policies of the labor contracting companies they work with and ensuring the adequacy of their wages and workers compensation coverage.

To see the bill in its entirety, click here.