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ASA Proposes Small Business Size Standards for OSHA Covid ETS

On Oct. 18, ASA submitted a letter to the U.S. Office of Information and Regulatory Affairs asking that the forthcoming Covid-19 Emergency Temporary Standard, which will apply to businesses with 100 or more employees, consider the unique operating characteristics of staffing agencies by including alternative size tests for determining their small business status under the ETS.

ASA proposed that the ETS adopt the headcount approach used for determining employer eligibility for the Employee Retention Tax Credit under the Taxpayer Certainty and Disaster Tax Relief Act of 2020—i.e., 130 hours per month, without regard to full-time equivalent employees.

ASA also proposed that the ETS should include alternative size tests for determining small business status based on financial measures like revenue and assets. The letter suggested that the ETS adopt the tests used in the federal Paycheck Protection Program. Under the PPP, a staffing agency is a small business concern if its annual revenue is $30 million or less. The letter further suggested that the ETS include a size test similar to the “alternative size standard” from the U.S. Small Business Administration, under which a borrower was considered a small concern if its maximum tangible net worth at the time of application was not more than $15 million and its average net income after federal income taxes (excluding any carryover losses) for the prior two full fiscal years was not more than $5 million.

ASA is in the process of seeking a meeting with OIRA to discuss these proposals.

ASA Files Amicus Brief With U.S. Supreme Court on Per Diem Class Action Ruling

On Oct. 18, ASA filed an amicus brief asking the U.S. Supreme Court to review a class action relevant to health care staffing agencies and others that reimburse traveling workers through per diem payments.

ASA asked the court to reverse a Ninth Circuit Court of Appeals ruling that a health care staffing agency’s payments are compensation for work and thus must be included in traveling workers’ regular rate of pay for overtime purposes. If allowed to stand, the Ninth Circuit’s decision could harm many staffing agencies, particularly in the health care sector. As many as 20 other firms face or have faced similar lawsuits.

Per diem payments may be excluded from calculation of overtime under the Fair Labor Standards Act if the payments reimburse workers for meals, incidentals, and housing incurred on behalf of the employer while working away from home. They may not, however, effectively function as compensation for work.

The plaintiffs allege that the agency’s per diem payments functioned as compensation because they were prorated when the workers did not work hours or shifts required under their contracts. The trial court rejected this argument, but the Ninth Circuit reversed, holding that a combination of factors indicated that the payments functioned as compensation for hours worked. The factors included tying the per diem deductions to shifts not worked regardless of the reason for not working. The ASA brief argues that the court incorrectly interpreted the relevant statute to prohibit such practice.

The Supreme Court reviews only a limited number of cases each session, and it will be several months before it is announced if the court will grant review of this case. ASA is represented by one of the top Supreme Court litigators in the country: Donald Verrilli, who was U.S. Solicitor General from 2011 to 2016.

ASA Files Lawsuit Challenging Nevada Ban on Construction Staffing

ASA has filed suit against the state of Nevada challenging a law that, effective Oct. 1, 2021, would bar staffing agencies from providing skilled construction labor—the first time any state has attempted to impose an outright ban on the services a staffing agency can provide. The lawsuit, filed Aug. 31, seeks an injunction and a declaration that the law is unconstitutional.

ASA Meets With Top Officials at Departments of Labor and Commerce

Earlier this week, ASA staff met with U.S. Secretary of Labor Marty Walsh and Kevin Gallagher, senior adviser to U.S. Secretary of Commerce Gina Raimondo. The introductory meetings focused on the importance of the staffing industry to the U.S. economy as well as the role ASA members have played during the Covid-19 pandemic.

ASA staff apprised Secretary Walsh of the many opportunities the staffing industry offers the U.S. workforce, including flexibility and choice. Secretary Walsh noted his past dealings with the industry when he was a state legislator and the important role that staffing companies play.

Gallagher also was familiar with the industry through his previous role as deputy chief of staff for then-Rhode Island Gov. Raimondo, and noted the industry’s commitment to worker training and upskilling. Both Walsh and Gallagher suggested that this should be the first of several meetings between the staffing industry and their agencies as the economy continues to recover from the pandemic.

Learn more about ASA’s ongoing advocacy efforts on behalf of the staffing industry.

Ohio Repeals Sales Tax on Staffing Services

After years of effort by ASA, the Ohio Staffing & Search Association (an ASA-affiliated chapter), and allies in the Ohio Chamber of Commerce, the Ohio legislature quietly and without public fanfare repealed the state sales tax on employment services. The repeal provision, which was part of a massive state budget bill, was signed into law by Gov. Mike DeWine on June 30. The repeal becomes effective on the 91st day following enactment.

Special thanks to Tom Erb and Larry Kidd, longtime ASA members and industry leaders in Ohio, who spearheaded the final push that resulted in the win. ASA has long argued that, by increasing the cost of staffing services, the tax had an adverse effect on jobs and a negative ripple effect throughout the state economy. The influx of money flowing to the state from the American Rescue Plan Act, which Congress passed earlier this year, is believed to have mitigated lawmakers’ concerns about the loss of tax revenue that historically has been an obstacle to repeal.

ASA and Industry Advocacy Thwart Two California Bills Affecting Staffing

As the California legislature approached its deadline for moving bills from the house of origin to the second house, advocacy efforts led by ASA, its affiliated chapter California Staffing Professionals, and California lobbyist Mike Robson of Edelstein Gilbert Robson & Smith LLC were instrumental in derailing two California bills that would have had a major negative impact on the staffing industry.

AB 650 would have required covered employers, including health care staffing agencies, to pay hazard pay retention bonuses in 2022. AB 1192 would have required large employers to annually collect and submit wage and other worker-related statistics to the Labor and Workforce Development Agency.

The staffing industry worked with several business groups and trade associations, including the California Hospital Association, in opposing AB 650, urging lawmakers to reject the bill due to its cost implications. Regarding AB 1192, ASA and CSP argued that, given the varying nature of temporary assignments, temporary worker wage and other metrics submitted by staffing agencies would be misleading.

Following weeks of discussions and negotiations, both AB 650 and AB 1192 were moved to the inactive file, meaning they will not be taken up this year. Both bills can be reconsidered during the 2022 legislative session and ASA will re-engage if necessary next year.

Washington State Enacts Temporary Worker Safety Law

Last week, Washington Gov. Jay Inslee signed a new law aimed at ensuring temporary worker safety in the construction and manufacturing industries. The law requires host employers to review the safety training provided by staffing firms, document and inform staffing firms about the site-specific hazards temporary workers may face, and train temporary workers on any such hazards. If a temporary worker’s job tasks or work location change and new hazards may be encountered, the host employer must inform the staffing firm and employees and must ensure that updated training and personal protective equipment are provided, as necessary.

The law was drafted by the Washington State Department of Labor and Industries. Given that passage was all but certain, the American Staffing Association, lobbyist Melissa Gombosky, and members of the ASA employee safety committee worked with L&I to remove unnecessary and overly burdensome requirements.

Appeals Court Enjoins San Antonio Paid Sick Leave Law

On March 10, the Texas Fourth District Court of Appeals upheld a temporary injunction prohibiting San Antonio’s paid sick leave ordinance from going into effect, ruling that the ordinance is unconstitutional. ASA—as well as several staffing firms, business groups, and businesses—is a plaintiff in the lawsuit challenging the ordinance’s legality.

The ordinance, which provides one hour of paid sick leave for every 30 hours worked and includes no waiting period for leave use, effectively creates a minimum wage and therefore violates the Texas Minimum Wage Act, which supersedes all local wage ordinances, the court ruled. A paid sick leave ordinance in the city of Austin was similarly struck down in 2018. It is unclear whether the city of San Antonio will appeal the court’s decision.

Industry Advocacy Helps Derail Unnecessary Employer Legislation in Rhode Island

Advocacy by ASA and the Rhode Island Staffing Association, an ASA-affiliated chapter, helped persuade state lawmakers to put legislation on hold that would have imposed new regulatory burdens on businesses that use contract labor.

Rhode Island bill S 139 would make any employer or organization that obtains workers through a subcontractor, staffing organization, or other labor contractor legally liable if that labor contractor violates any of the payment-of-wages laws under Title 28 of the Rhode Island General Laws.

ASA and RISA submitted testimony outlining the staffing industry’s objections to the bill. They argued that the bill was redundant and unnecessary because users of contract labor have long been responsible as joint, special, or secondary employers under a wide range of federal and Rhode Island state labor and employment laws covering every aspect of the employment relationship whenever the user firm directs and controls the work performed by the contract employees.

A coalition of Rhode Island businesses also objected to the bill, arguing that it would penalize users of contract labor even if they had no knowledge of any violation of the wage payment laws.

Faced with unified business opposition, the senate labor committee referred the bill for study, effectively killing it for the year. If lawmakers revisit the subject again during the 2022 legislative session, ASA and RISA will renew their objections.

At Association’s Request, CDC Says Temporary Workers Should Be Included in Client’s Vaccination Plans

At the urging of ASA and members of the ASA employee safety committee, the U.S. Centers for Disease Control and Prevention recently updated its website to state that temporary workers should be included in clients’ vaccination plans for essential workplaces. This development is significant, as some health care clients had been reluctant to include temporary workers.

The updated guidance at cdc.gov says, “For workers employed by contract firms or temporary help agencies, the staffing agency and the host employer are joint employers and, therefore, both are responsible for providing and maintaining a safe work environment. Workers should be considered for vaccination prioritization according to the primary industry activities at the site(s) where they work, even if the industry category of their actual employer does not fall within these lists.”

ASA participates in the government’s National Occupational Research Agenda service sector group, which provides a research framework to CDC. Through NORA, ASA urged CDC to address clients’ vaccination of temporary workers.