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ARTICLE · 12 JANUARY 2015

New Year Brings New Liability When Using Outsourced Labor

Fisher Phillips LLP
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Beginning January 1st, California law requires "client employers" to share certain compliance responsibility and liability with the companies that provide them with contract labor.

United StatesEmployment and HR
Bethanie Barnes
Bethanie Barnes
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Beginning January 1st, California law requires “client employers” to share certain compliance responsibility and liability with the companies that provide them with contract labor, such as staffing agencies. Client employers are defined as private employers with at least 25 employees that utilize at least six temporary workers from a staffing contractor, subject to limited exceptions.

Client employers can face liability for the contractor’s failure to: 1) properly pay wages; 2) secure workers’ compensation insurance; and 3) comply with workplace safety laws. This opens the door for significant new litigation risk as affected workers are permitted to pursue civil actions, including class actions, against the client employer for the labor contractor’s failure to comply with California wage and safety laws.

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