California
could become one of the first states in the nation to hold companies legally
responsible for wage and safety violations by their subcontractors and temp
agencies if a bill proposed Friday becomes law.
The
bill tackles the longstanding complaint of labor leaders that companies can often
shirk responsibility for the abuse of workers by hiring them through agencies
or contracting with smaller firms.
A
ProPublica investigation last year found that temp workers face high rates of
wage violations and on-the-job injuries, but rarely have recourse against the
brand-name companies whose products they move, pack or assemble. Typically,
only the agencies or subcontractors that directly employ workers face fines
when something goes wrong, even when fulfilling contracts with larger firms
that indirectly control or influence the work conditions.
Unions
and other worker advocates say the bill would protect temps and subcontracted
workers, such as building janitors, by holding the companies at the top of the supply
chain accountable.
“Current law is simply insufficient to protect workers’ rights in
the shadows of the subcontracted economy,” Caitlin Vega of the California Labor
Federation said in a letter supporting the bill. “This simple rule will
incentivize the use of responsible contractors, rather than a race to the
bottom.”
California
is at least the second state this year to take up bills to protect temporary
and subcontracted workers. Earlier this month, a New Hampshire legislator
introduced a bill to
curb the practice of charging workers fees to be taken in temp agency vans to
work for unknown companies. That bill would limit such fees and require agencies
to tell workers in writing their wage, the name of the company, the location of
the job and the workers’ compensation insurance carrier in case of injury.
At
least 10
states currently have laws that regulate temp and day labor agencies in
some way. Massachusetts, Illinois, New Jersey and Texas, for example, require them
to register with the state. Florida and Georgia limit or prohibit fees they can
charge for transportation to and from a worksite.
But
California would be one of the first to take on the companies that contract
with temp agencies to supplement their workforce.
The
bill, sponsored by Assemblyman Roger Hernandez, would make companies that
contract for labor — for example, a warehouse, farm owner or hotel
— liable if one of their subcontractors fails to pay employees their
wages, provide workers’ compensation insurance or submit unemployment taxes to
the state.
Such
a law is likely to face steep challenges from the business community. At a labor
and employment committee hearing on March 12, Jennifer Barrera of the
California Chamber of Commerce said the state already had enough laws to deal
with bad actors. Small businesses turn to staffing agencies to avoid the
headaches that come with complying with various employment regulations, she
said. A new law, she said, would
only further burden them.
“They
don’t want to violate the law,” she said. “But they just don’t know what to do
or how to meet those obligations as we continue to increase the mandates on
them.”
But
Mark Schacht, deputy director of the California Rural Legal Assistance
Foundation, a farmworker rights group, argued that unless businesses at the top
of the supply chain are liable for violations that occur on their property, they
have no incentive to ensure safe and fair conditions.
Schacht
pointed to California’s mixed experience regulating farm labor. The state has
required farm labor contractors to be licensed for 63 years. Yet abuses
continue, he said, because growers can simply claim ignorance and swap one
contractor for another. Proving the grower bears responsibility could require
years in court and expensive legal fees, he said.
With
a strong liability law, Schacht said, “the grower knows if he doesn’t deal with
a reputable contractor, he’s going to be liable. He knows that if he doesn’t
supervise the contractor in the field, he’s going to be liable.”
“What
will happen,” he said, “is that the bad contractors will be unable to secure
contracts.”
A recent dispute in
Massachusetts underscores the problem. Temp workers packaging goods destined for
Dunkin’ Donuts and Subway say
the temp agency failed to pay them overtime. When they complained, supervisors told
them the agency didn’t have the funds for overtime because the packaging
company didn’t pay them enough, according to the worker rights group, the
Massachusetts Coalition for Occupational Safety and Health.
At the California hearing, Assemblyman
Hernandez and various witnesses repeatedly cited stories written by ProPublica
last year in arguing for better protections for temp workers.
The
stories documented the growth of so-called “temp
towns,” where workers can’t find jobs
without going through temp agencies, and the abuses of immigrant
labor brokers, who work with temp agencies to supply workers to brand-name
companies. The investigation found that temp agencies consistently rank among
the worst large industries for the rate of wage and hour violations.
A ProPublica analysis
of workers’ compensation claims showed that temps face a significantly greater
risk of getting injured on the job than permanent employees, particularly
when it comes to severe injuries such as amputations.
During
the hearing, some workers testified that they are often put in unsafe
situations and don’t get paid their full wages on time. They explained that many
workers don’t complain because they’re uncertain who their employer actually is
or fear that the temp agency will stop sending them to jobs.
Gladys
Hernandez, who was a temporary housekeeper at a DoubleTree
hotel in Santa Monica, Calif., told committee members that to clean her quota
of rooms each day, she sometimes had to go downstairs, clock out and then
finish the rooms off the clock.
A
spokeswoman for Hilton Worldwide, which owns the DoubleTree
brand, said that because the hotel was a franchise, Hilton “has no ability or
authority to influence or dictate any labor related issues at that property.” The
franchise owner, The Procaccianti Group, did not
return calls or emails seeking a response.
Hernandez
said that in February, she and several coworkers complained to DoubleTree management.
“The
next day,” she testified, “I was told not to come back.”
