Legislation in Virginia that would have prohibited employers in the state from requiring workers to repay money or incur financial penalties if they leave a job within a certain period of time has been defeated. The bill sought to ban the use of “stay-or-pay” contracts, defined as employment agreements requiring employees to repay certain costs if they leave a job. As drafted, the legislation would have rendered certain agreements between international recruitment agencies and foreign-educated health care professionals unenforceable. Because these agreements are foundational to the international recruitment model, the bill threatened to effectively eliminate this pathway for bringing qualified health care professionals into Virginia.

Legislation that would eventually repeal Washington’s retail sales tax treatment of temporary staffing services has passed in the state legislature and been sent to Gov. Bob Ferguson for consideration. The bill would sunset the tax treatment beginning Jan. 1, 2030.

Last year, lawmakers enacted ESSB 5814, which, among other provisions, reclassified temporary staffing services as retail sales. Effective Oct. 1, 2025, staffing firms were required to collect retail sales tax from customers. Previously, most staffing services were not subject to sales tax and were taxed only under the business and occupation tax classification for service industry businesses.

Washington’s decision to tax temporary staffing services as retail sales was part of a broader effort to raise state revenue by expanding the sales tax base to certain services. ASA and other industry representatives raised concerns that applying retail sales tax to staffing services would effectively increase the cost of labor by 6.5% plus local taxes, particularly affecting industries that rely heavily on contingent labor. Health care providers, manufacturers, logistics companies, and other employers warned that the change could make it more expensive to address workforce shortages.

The newly passed bill, SSB 6346, was one of several technical correction bills considered during the recently completed session. Among other provisions, the bill creates targeted exemptions for certain sectors—including hospital-based clinical staffing arrangements and certain services purchased by schools and educational entities—and includes a provision repealing the broader service tax expansion beginning Jan. 1, 2030.

Gov. Ferguson has up to 20 days after the legislature adjourns to sign or veto the bill. The legislature adjourned March 12.

In an unusual legislative twist, a Florida bill that that would have barred day labor firms from charging clients conversion fees will not pass this year due to lack of support in the Florida House. When the state legislature adjourns for the year later today, it will mark one of the more improbable legislative journeys for a bill that was unanimously approved earlier this month by the Florida Senate.

ASA recently defeated legislation in Maine that, if enacted, would have imposed automatic joint and several liability on staffing companies, effectively holding them responsible for a myriad of actions and decisions made solely by client employers.

Working with the association’s Maine lobbyist Kim Cook from Government Strategies, ASA submitted written testimony to the Maine Joint Labor Committee explaining that the legislation would have increased legal exposure and discouraged staffing companies from serving certain employers or industries, particularly small businesses and emerging enterprises that rely most heavily on temporary staffing. These outcomes would directly reduce employment opportunities for Maine workers, including individuals seeking entry-level positions, flexible schedules, or pathways back into the workforce.

Following conversations with ASA and other business coalitions opposing the bill, Maine Rep. Matthew Beck, the bill’s sponsor, agreed that the bill in its current form was problematic. He agreed that the issue and bill language needed additional time and development.

Due to the short legislative session, the committee recommended defeating the bill and the state House and Senate both concurred. Rep. Beck did indicate that he would introduce a similar bill for consideration in the 2027 legislative session.

State legislatures bombarded their constituents with thousands of labor and employment bills in 2025, some directly targeted at the staffing industry—many of which, if enacted as drafted, would have had dire consequences for staffing firms and the employees they place every day.

Thankfully, ASA advocacy efforts, and the efforts of ASA-affiliated chapters, saved the day. ASA was there in state capitals to make the industry’s presence felt, and chapters filled committee hearing rooms to tell the industry’s side of the story.

In 2025, ASA executed an extensive and highly effective legislative advocacy strategy across the federal and state levels, engaging proactively on a broad range of tax, employment, artificial intelligence, health care staffing, and other regulatory issues that directly affect the staffing industry. Through direct lobbying, coalition leadership, member engagement, and targeted testimony, ASA helped secure major federal policy wins, mitigate or defeat harmful proposals in numerous states, and shape emerging regulatory frameworks.

Key engagements included successful federal tax advocacy through enactment of HR 1; strategic amendments to problematic state legislation; and the defeat or delay of several high-risk bills that would have imposed rate caps, conversion fee bans, or burdensome registration and reporting requirements on staffing firms. A detailed picture of the bills and issues ASA engaged on in 2025 is available in the 2025 ASA Legislative Scorecard. Here are some of the highlights.

The American Staffing Association, in collaboration with California Staffing Professionals, an ASA-affiliated chapter, played a central role in defeating California’s AB 1018, a bill that proposed sweeping new obligations for employers using automated decision systems (ADS) in the hiring process.

Thanks to the industry’s robust advocacy efforts, including submission of testimony and meetings arranged by ASA lobbyists Mike Robson and Molly Maula, the bill was significantly amended to reflect staffing employer concerns. Most notably, ASA successfully pushed for the removal of burdensome audit and impact assessment requirements, as well as unwieldy opt-out requirements for job applicants and employees. The amended bill also allowed staffing firms to meet pre-use notice obligations via website postings, offering some practical relief for an industry that processes thousands of candidate applications daily.

Notwithstanding the improvements, ASA continued to oppose the bill through the end of the legislative session due to the retention of unworkable post-decision notification mandates that would have required individualized notices to every applicant affected by each ADS decision, including the reason for the decision, key influencing data, and appeal procedures. ASA submitted testimony explaining why such a requirement is incompatible with the high-volume, fast-paced nature of staffing operations.

Ultimately, AB 1018 was held without a vote on the Senate floor. The bill’s author has plans to revisit the legislation in 2026, and ASA remains committed to advocating for solutions that balance artificial intelligence governance with operational realities.

The Illinois Department of Labor has initiated the process of developing regulations to implement the equal benefits provision of the Day and Temporary Labor Services Act that was enacted in 2024. The provision requires day and temporary labor agencies to provide laborers who have completed 720 hours of service with a client in a 12-month period with benefits substantially similar to those provided to client employees performing the same or substantially similar work. Agencies have the option of paying laborers the hourly average cash equivalent of the cost of the benefits clients provide to such employees.

The benefits provision of the act is the subject of a lawsuit filed by ASA and several staffing agencies challenging the provision on the grounds that it violates the federal Employee Retirement Income Security Act. At the invitation of the Illinois Department of Labor, ASA has submitted comments asserting that any rules the department issues consistent with the act will necessarily also conflict with Erisa. Nonetheless, to mitigate some of the adverse consequences on staffing agencies should the law ultimately be deemed compliant with Erisa, ASA has proposed that the department clarify several of the benefit provisions that are unclear or ambiguous. A copy of the association’s comments is available at americanstaffing.net.

ASA has filed comments on new regulations proposed by the Illinois Department of Labor to implement last year’s amendments to the state’s Day and Temporary Labor Services Act. The amendments made significant changes in the law’s equal pay provisions and other rules, including changing the waiting period for employee eligibility for the benefit from 90 days to 720 hours.

The proposed rules do not include provisions relating to the equal benefits provisions of the act that ASA, the Staffing Services Association of Illinois, and several individual staffing firms challenged in court. By agreement of the parties, the court case has been stayed until 45 calendar days after the effective date of final regulations on those provisions. Once benefit rules are published, the parties will assess the status of the lawsuit. You can read the association’s comments at americanstaffing.net.

A Massachusetts labor arbitrator has ruled that Harvard University’s collective bargaining agreement does not require temporary staffing agency employees used by the university dining service to be paid on par with in-house, unionized employees. Harvard retained ASA senior counsel Ed Lenz to provide expert testimony in support of the university’s position.

Following months of meetings, negotiations, starts and stops, and tweaking, adding, and removing language, Congress passed H.R. 1, “An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14” (also known as “The One Big Beautiful Bill Act”). The 870-page bill was signed into law by president Trump on July 4.

Since the 119^th Congress convened in January, ASA has held more than 60 meetings with key members of Congress and staff of the House Ways and Means Committee, including chairman Jason Smith (R-MO), as well as staff and members of the Senate Finance Committee and the Senate Health, Education, Labor and Pensions Committee. While the bill touches every aspect of federal policy from taxes to health care to immigration to defense to energy, ASA advocacy efforts focused on making permanent Section 199A, the qualified business income deduction; preservation of the Individual Coverage Health Reimbursement Arrangement classification for temporary workers; preservation of the favorable tax treatment for per diem plans; and the future of the Work Opportunity Tax Credit. See the full article detailing the advocacy efforts and accomplishments of the ASA legal team.

ASA will closely monitor the implementation of H.R. 1, especially as new rules and technical guidance are developed and published. If you have any questions regarding the bill and how it may affect your company, feel free to reach out to the ASA legal department.