Today and through the remainder of the year in this space, ASA will recap the association’s efforts in successfully defeating or significantly mitigating proposed legislation that would have harmed the staffing industry.

Earlier this year, the Connecticut legislature introduced and considered HB 6859, legislation that would have required staffing agencies to provide employees with advance notice of work schedules and changes in schedules. The bill would have also required businesses to “make every effort” to schedule existing employees before hiring a new employee from a staffing agency. This was the sixth consecutive year that the state’s legislature considered such legislation.

In written opposition testimony, ASA explained that staffing firms could not comply with the bill’s requirement to provide a written estimate of the employee’s work schedule at the time of hire—including the average and range of hours the employee could expect to work each week plus the number, length, and days of their shifts—because staffing firms usually do not know that information at that time.

ASA also objected to the bill’s requirement that, before hiring a new employee from a staffing firm, an employer must “make every effort” to schedule its existing employees. ASA argued that every employer should be able, without delay, to obtain the help it needs in exigent circumstances. Many requests for temporary help could not be timely met, or met at all, if a business had to first canvass its workforce to identify individuals who might be willing and able to perform the work.

ASA lobbyist Kevin Hill of Powers, Griffin & Hill then arranged for a meeting with the bill’s sponsors to discuss the association’s concerns. Ultimately, the legislation was not called up for consideration and the bill died when the legislature adjourned in June.

Changes in Congress and several state legislatures made it almost impossible to predict what legislative challenges the staffing industry might face in 2023. With the height of the Covid-19 pandemic in the rearview mirror, it appeared that legislators would turn their attention to more traditional labor and employment issues, such as minimum wage increases, predictive scheduling, and pay equity.

Efforts to regulate health care staffing also continued in numerous states, occupying the majority of the association’s legislative activities. ASA also joined a lawsuit to fight back against a newly enacted “first of its kind” temporary worker pay equity law in New Jersey; some of its most troubling provisions then were adopted in Illinois. ASA further engaged on artificial intelligence measures as well as worker misclassification issues. Through it all, ASA secured major victories to ensure that its members could remain unencumbered in placing people in jobs.

As the calendar hits August, most state legislatures have adjourned, and those that have not are in the process of wrapping up proceedings for the year. However, in New Jersey and Illinois, there is still plenty of work being done when it comes to both states’ recently passed temporary worker rights bills.

In New Jersey, a federal court in late July denied the staffing industry’s motion to enjoin the Temporary Workers’ Bill of Rights Law enacted by the legislature earlier this year. The law, which applies to construction, light industrial, and other workers—but not professional or clerical workers—mandates temporary employee wages and benefits equivalent to those received by client employees performing similar work, limits conversion fees, and prohibits agencies from charging a fee for providing transportation, among other things.

Despite finding that the law likely will result in irreparable harm to many staffing firms, the court held that the industry’s arguments that the law is unconstitutional were unlikely to succeed at trial. In response to the court’s ruling, the group that brought the original lawsuit—the American Staffing Association; the New Jersey Staffing Alliance, an ASA-affiliated chapter; and the New Jersey Business and Industry Association—have filed a notice of appeal in the U.S. Court of Appeals for the Third Circuit appealing the district court’s denial of the parties’ request for a preliminary injunction. The parties will ask the Third Circuit to stay the district court’s action and enforcement of the statute while the appeal is pending.

Illinois Gov. J.B. Pritzker signed HB 2862, legislation that amends the Illinois Day and Temporary Labor Services Act to provide that temporary employees must be paid the same or similar pay and benefits received by equivalent direct hire employees after working for more than 90 calendar days for a client, among other things. ASA and its Illinois lobbyist Paul Rosenfeld met with legislators and secured modifications that significantly mitigate the impact of the amendments. ASA has submitted a letter to Gov. Pritzker urging the Illinois Department of Labor to delay implementing the law until final regulations are adopted with input from ASA and the Illinois Search and Staffing Association, an ASA-affiliated chapter.

HB 2862, which amends the Illinois Day and Temporary Labor Services Act, passed the Illinois legislature earlier this month and is on Gov. J. B. Pritzker’s desk awaiting signature. The amendments are scheduled to take effect July 1. Although ASA advocacy secured significant improvements in the bill that will reduce the administrative burden on staffing agencies, the new law will, among other things, require them to provide pay to their temporary employees who have worked more than 90 calendar days that is the same as or similar to pay and benefits paid to client employees working similar jobs. ASA has asked that those provisions be delayed until final rules are issued. In the meantime, however, staffing agencies will be expected to make good faith efforts to comply.

As the California legislature approached its deadline for moving bills from the house of origin to the second house, advocacy efforts led by ASA; California Staffing Professionals, an ASA-affiliated chapter; and California lobbyists Mike Robson and Bridget McGowan 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 331 would establish various requirements for the use of automated decision tools (ADTs), including in the employment context. Among other things, the law would require that developers and users of ADTs prepare yearly impact statements addressing the use and validity of the ADTs, prepare governance programs to manage the risk of algorithmic discrimination, notify all persons subject to a consequential decision made by an ADT, and provide an alternative selection process for individuals who choose not to be subject to ADT evaluation.

SB 809 would eliminate an employer’s ability to consider an applicant’s conviction history save for a few very narrow exceptions, such as when considering applicants for jobs in industries the government deems sensitive in nature. Thus, companies outside those industries would be prohibited from considering applicant conviction history. For those companies permitted to consider conviction history, the bill would prohibit an adverse action against an applicant due to a delay in obtaining information regarding the applicant’s conviction history, even where that delay was outside of a company’s control.

The staffing industry worked with the California Chamber of Commerce to oppose or suggest amendments to the bills. For AB 331, amendments proposed by ASA would, among other things, limit the circumstances in which candidates may opt out of ADT evaluation, thereby ensuring that staffing firms could continue to place candidates in jobs in a timely manner. For SB 809, ASA joined a coalition of employer groups in opposing the bill on the basis that it would prohibit staffing firms from conducting criminal background checks for most jobs, including in cases where staffing firm clients require background checks of potential candidates.

Following weeks of discussions and negotiations, both AB 331 and SB 809 were moved to the inactive file, meaning they will not be taken up this year. Both bills can be reconsidered during the 2024 legislative session, and ASA will re-engage if necessary next year.

As part of its ongoing efforts to bring worker misclassification issues to the attention of regulators, ASA has submitted a request to the U.S. Treasury Department under the department’s Priority Guidance Program. The ASA request seeks clarification of the legal issues relating to the use of online platforms that classify nurses and nurse aides as independent contractors, especially the obligations of the health care clients that use the services of those workers. The association’s PGP submission can be found at regulations.gov.

On May 5, the New Jersey Staffing Alliance, an ASA-affiliated chapter, along with the New Jersey Business and Industry Association—with support from ASA—filed a civil lawsuit against the state of New Jersey and various institutional and individual defendants in the U.S. District Court for the District of New Jersey. The lawsuit challenges the validity of A 1474, a first-of-its-kind law recently enacted in New Jersey that regulates the staffing industry by mandating temporary employee wage and benefits payments equivalent to those received by client employees performing similar work; limiting conversion fees; and prohibiting agencies from charging a fee for providing transportation.

Among other claims, the lawsuit alleges the new law violates the Commerce Clause of the U.S. Constitution. The lawsuit further alleges the new law’s vagueness violates the Due Process Clause of the Constitution and that it separately violates the Constitution’s Equal Protection Clause. Accordingly, the suit seeks a court order restraining the state of New Jersey from enforcing or implementing the law.

A 1474 applies to construction, light industrial, and other workers, but not to professional or clerical workers. Over the prior 10 months, ASA and NJSA, along with their member staffing agencies, engaged in an extensive grassroots campaign explaining to legislators why the bill is bad for workers and the staffing industry. Those efforts blocked three previous attempts to pass the bill, but ultimately the overwhelmingly pro-labor forces prevailed.

Since the bill’s passage, ASA, NJSA, and industry lobbyists have been in conversations with state senators. ASA and NJSA officials also met with the New Jersey Department of Labor in early March regarding forthcoming regulations implementing the new law and followed up with written suggestions regarding the regulations. Among the areas of concern were the law’s equal pay provision—including the definition of “benefits” and “same or substantially similar work”—the limitation on conversion fees, and the transportation provisions.

Section 3 of the new law, which imposes new employee notification requirements on staffing agencies, and Section 10, which prohibits retaliation against employees that exercise their rights under the law, became effective May 7. Most of the law’s other requirements are set to become effective Aug. 5. However, NJDOL officials earlier informed ASA and NJSA that it is highly unlikely that final rules will be ready by August. They also said they would proceed with a “light enforcement touch” until final regulations are published and investigators are properly trained. NJSA and ASA published a detailed issue paper about the law, which is available at americanstaffing.net.

NJSA, NJBIA, and ASA are represented by the New Jersey law firm of Javerbaum Wurgaft Hicks Kahn Wikstrom & Sinnis PC.

Representatives from ASA; the New Jersey Staffing Alliance, an ASA-affiliated chapter; and lobbyists representing staffing firms met last week with officials from the New Jersey Department of Labor and Workforce Development to discuss the pending regulations for the implementation of A 1474. Gov. Phil Murphy signed his conditional veto of A 1474 into law last month.

The hourlong meeting focused on the staffing industry’s concerns and suggestions for how state regulators might address certain sections of the new law. Among the areas of concern were the law’s equal pay provision—including the definition of “benefits” and “same or substantially similar work”—the limitation on conversion fees, and the transportation provisions.

Although state regulators were mostly in a “listen only” mode, they acknowledged that the regulations would need to clarify various parts of the new law. They said they were unlikely to meet the deadlines set out for final rules—90 days following the enactment of the law for section three and section 10, and 180 days following enactment for the rest of the law. They also said they would proceed with a “light enforcement touch” until final regulations were published and investigators were properly trained. Following the meeting, NJSA outside counsel Marc Freedman sent the department a letter offering sample language to address the industry’s various concerns. The letter is posted on americanstaffing.net.

ASA and NJSA will continue to update members as developments unfold. NJSA published an information sheet detailing the impact of the new law; it’s available to ASA members at americanstaffing.net.

California’s new pay data reporting law, SB 1162, requires staffing agencies to submit payroll employee reports that include pay information categorized by employee race, ethnicity, and sex. The law also requires certain staffing agency clients to submit separate labor contractor employee reports with the same pay data information for employees provided to the clients by staffing agencies.

Because staffing agencies have not historically maintained race and ethnicity data for their employees, California’s Civil Rights Division—at the urging of ASA—is allowing “unknown” to be reported for staffing agency employees. This exception, which only applies for the 2022 reporting year, applies to both staffing agency payroll employee reports and client labor contractor employee reports. Clients can report “unknown” on labor contractor employee reports using the template report that is available for download on CRD’s website. Staffing agencies can report “unknown” on a special staffing agency payroll employee report that is available for download here. A copy of the staffing agency payroll employee report can also be obtained by emailing paydata.reporting@dfeh.ca.gov. Note that the “unknown” category can be selected only where that information is in fact unknown and not reasonably obtainable before the filing deadline.

Additionally, on Feb. 2  ASA hosted an exclusive webinar with Adam Romero, deputy director of executive programs for CRD, on SB 1162. Although the webinar was not recorded, slides from Romero’s presentation are now available for download on CRD’s website.

Yesterday, the California Civil Rights Department published answers to frequently asked questions on SB 1162, a law enacted last year requiring staffing agencies to report to the state temporary employees’ annual “pay data” by race, ethnicity, and sex, and also requiring staffing agency clients to submit separate reports covering the employees provided by staffing agencies.

The FAQs follow a Nov. 8, 2022, meeting between ASA representatives and Adam Romero, deputy director of executive programs for CRD. The purpose of the meeting was to clarify several items of importance to the staffing industry. ASA asserted that SB 1162 requires employers (staffing agencies and clients) to report on staffing agency temporary employees assigned during a particular snapshot period, rather than all employees who were assigned within a year. ASA also requested relief from having to provide race, ethnicity, and sex data on employees for the 2022 reporting year, given that the industry has never had to provide such data and most agencies do not have processes in place for obtaining it.

The FAQs favorably reflect input from ASA. They confirm that staffing agencies and clients must report pay data only for a single “snapshot period,” or pay period, between Oct. 1 and Dec. 31 of each reporting year. CRD encourages staffing agencies and their clients to collaborate on selecting a snapshot period for pay data reporting purposes. Thus, staffing agencies and clients should work together to select a snapshot period, occurring between Oct. 1 and Dec. 31, 2022, for the 2023 filing deadline of May 10, 2023.

Second, for reporting year 2022, staffing agencies and clients can report “unknown” with respect to temporary employees’ race, ethnicity, and gender, where that information is indeed unknown and not reasonably obtainable before the filing deadline. The FAQs add that staffing agencies and clients should not expect this option in the future, and that they should implement plans to obtain accurate information from employees for subsequent reporting years.

The FAQs also clarify the threshold for determining whether staffing firms and clients are required to submit reports. The FAQs note that if a staffing agency either (a) had 100 or more employees in the snapshot period, or (b) regularly had 100 or more employees during the reporting year, it is required to submit a pay data report. Similarly, the FAQs note that if a client either (a) had 100 or more labor contractor (temporary) employees in the snapshot period—in total from all of its staffing agencies (the FAQs and law refer to such agencies as “labor contractors”), or (b) regularly had 100 or more temporary employees during the reporting year, it is required to submit a labor contractor employee report.

ASA will host an exclusive webinar on the FAQS, featuring CRD representatives, in the coming weeks.